In essence, there are two types of links: natural and artificial. Natural links are those hyperlinks that are placed on relevant web pages pointing to other pages that could be of interest to visitors of the site. The purpose of a natural link is not to improve the search engine ranking of a web site, but to provide visitors with a related resource. Artificial links, on the other hand, are hyperlinks that would not exist if they provided no benefit in the SERPs.
Ideally, all links would be natural and each site would have content that is so valuable and unique to users that other sites would link to it without being asked. This would make offsite optimization obsolete and search engines would have an easier job organizing web pages in the correct order measured by relevancy. Unfortunately, many companies do not have web sites that actually offer enough great content on their site to get other site owners to link to it. This is especially true with e-commerce sites and new web sites that are not fully developed yet. Some optimizers say that if a site does not offer great content, it should not be ranking in the first place. I tend to disagree with this statement. As long as the search results are relevant to the searcher and she finds what she is looking for, it should not matter whether the site offers a vast amount of information about the subject at hand.
The search engines, undoubtedly, prefer natural linking to artificial linking, and therefore they discourage the use of some link building techniques. However, some search engines like Google do recommend submitting web sites to main Internet directories like the Open Directory Project and Yahoo! Directory, in order to find and index the web pages faster (Google c). Furthermore, Yahoo! encourages correspondence “with webmasters and other content providers and building rich linkages between related pages” (Yahoo! c). In other words, Yahoo! recommends link exchanges between sites as long as they are relevant.
From optimization standpoint, inbound links are the most important type of link. These links, also called incoming links, back links or external links, are links that are pointing to the optimized site. Outbound links or outgoing links, on the other hand, are links that are pointing to other websites away from the optimized website.