Link building is not all about transferring PageRank. Don't get caught in the trap of basing your decision on high PageRank score alone. There are other considerations to be taken into account.

For example, your backlinks need to represent a range of importance scores (PageRank) so that Google doesn't construe your link network as unnatural. Building links exclusively or mostly from high PageRank endowed sites may flag your site for artificially trying to boost your PageRank. And do you really want to attract additional scrutiny?

For long term benefit and security, sites that are selected for inbound links should be from an on-topic neighborhood, have aged domains, and if possible, have .edu and .gov sites in there. The list of sites needs to be analyzed to ensure that there are no technical limitations that slow the flow of "link gain" (e.g. PageRank). For example, the directory Gimpsy.com has let pages with session IDs ("PHPSESSID") in the URLs slip into the indices, which makes it less ideal as a backlink.

In general, all links help (unless from "bad neighborhoods"), regardless of their PageRank. Some of the links NEED to be topically-relevant or your site is going to appear unfocused and the links won't appear to have been "earned," but instead bought, borrowed, bartered or stolen.

Directory submissions should be a component of your link building strategy, but don't put too much emphasis on them. As Stuntdubl says, you need to balance the link equation and not rely too heavily on directories, and you need to spread your submissions out over time.

Certain directories are considered to be "hubs" or "authorities" or both (unfortunately only the search engines know which ones, so try to cover your bases as best you can), in which case it may be used by a search engine as an indicator of the topically-relevant neighborhood that your site belongs in.

Bear in mind that toolbar PR scores are months old and can't really be trusted. The REAL PageRank is outside of our grasp, locked up within the Googleplex.

Also bear in mind that PageRank is Google-specific. That's not to say that you can't use PageRank to make some inferences about the importance of a page in the eyes of Yahoo! and MSN Search. The concept of "link gain" or weighted link popularity is alive and well at Yahoo and Microsoft, they just have different ways of calculating it and names for it. At Yahoo it's been referred to as "Web Rank" and "link flux" (a term from their days at Inktomi). I don't know what MSN calls it. The higher the PageRank, the more useful it is as an indicator of a powerfully important site across all 3 engines. For example, I'd have little doubt that a PageRank 9 link would be an amazing link opportunity that would reap benefits across Google, Yahoo, and MSN Search.

I'm a bit behind on my conference session blogging. Waaay too many parties going on; doesn't leave much time for blogging. The Google Dance last night. Yahoo! party at Great America the night before. And tonight I've got another party to go to. Yesterday I spoke on RSS. I'll post a recap on that session later.

I just attended "Search Engine Q&A On Links", which was great. Lots of useful advice from Google and Yahoo! about linking (nobody seemed to want to ask poor Ask Jeeves any questions). It was funny how obviously diametrically opposed the engines were to the immediately prior session on "Buying and Selling Links". It's hard to reconcile the two different sets of advice. Matt in the hallway before this session was adamant: "Don't buy links!"

Anyways, without any further ado, here's the session recap:

Kaushal Kurapati from Ask Jeeves:
Be cautious of: reciprocal links and purchasing links
Avoid: link farms, cloaking pages, invisible or hidden links that trick the crawler
Become an authority on a subject
Focus on your busines and content. Rest will follow. [I say: "yeah, right..."]
Teoma uses subject specific popularity: garner respect in your industry, subject-specific text based links can be understood. (hubs and authorities model)

Tim Mayer from Yahoo!:
Here's some important news!! Yahoo! has just launched a brand new service: Site Explorer from Yahoo! Search. Stop scraping the Yahoo site for backlink results and use Site Explorer instead. Access via an API is offered too. And you can export as a CSV file.
Yahoo has 19.2 billion web objects in its index. Over 20 billion objects, when you include the audio and video.
Plans to use community to improve search quality. Social search = within a trusted network, where someone within your network vouches for a site.
Create natural linking strategies. when things start to look unnatural, is when you'll start getting into trouble. We look at intent (linking to plasma TVs, diamonds, and Viagra all on the same page) and extent (i.e. what looks normal. Having everything on the page as links or 200 links on the page is too much!)
Yahoo! offers a much more comprehensive sample of backlinks than Google, but not a complete set of backlinks. New system (Site Explorer) will be reasonably comprehensive, in his opinion the most comprehensive out there.
It's unnatural to link to sitemap-1 sitemap-2 sitemap-3 sitemap-4 sitemap-5. If you are doing this, you're headed in the wrong direction.

Matt Cutts from Google:
Good links are earned links, links that are based on editorial discretion.
Create services that really useful. e.g newsletters, an article a day, syndicate through RSS (attribute my article and give me a link). start a blog.
Matt launched his blog today: mattcutts.com
Think outside the box.
Only SEOs and librarians do backlink searches. Historically we decided to dedicate a subset of our servers to backlinks. Only a sampling of backlinks would be displayed but only for a threshold of PageRank 4 or higher pages. A suggestion was made to show backlinks for lower PageRank pages too. We liked that idea so we now show a random sampling of backlinks, including low PageRank scoring pages too. We show twice as many backlinks as shown before, but still it's only a sampling of the backlinks.
In graph theory, a clique in every node in the graph is very unnatural. So don't link to every single node in your network of sites; it'll get flagged.
For dynamic sites, you're very safe if you have fewer than 2 parameters; keep the values of those parameters to fewer than 5 digits, and don't name a parameter "id". Googlebot sometimes tries variations of URLs by dropping parameters, but we only do that deep level analysis on big, quality sites.
Another good approach that alltheweb came up with: spider would always go 1 dynamic page deep from a static page.
Search engines only grab 100k or 200k or 500k so be careful loading up a huge page with a lot of links.
PageRank isn't as important as SOME people make it out to be. BUT it's NOT like "PageRank? Oh yeah let's shuffle that one under the rug! That was sooo 4 years ago!"
"BO" = backlink obsession
We export PageRank only once every 3 months or so.

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