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Maybe link exchange should be called interest exchange, the goal is to provide users with relevant content that enhance their web surfing experience. If a link exchange service captures the reader's desire to read more about a topic, then it works.
That is the philosophy behind Arkayne, we realized that interest means relevance which is derived from content, not popularity. By focusing Arkayne links around what the articles are talking about the readers interests are served. All else follows...
If you're a blogger and you want to increase your daily visits by 300 a day, how much time do you need to put in on link exchange? Answer: The time it takes to install a relevance based widget, 1.3 minutes.
If something like Arkayne links all your blog posts with 1,000 pages (conservative) and each page generates on average 10 clicks a month to your site (conservative), then you just got a boost of 333 clicks a day ongoing.
Add the reduced bounce rate from the relevant cross pollination of your own articles and the 1.3 minutes it takes to install the widget paid for itself big time.
How much time would it take the average blogger to get that traffic by focusing purely on Page Rank methodology?
Again the idea behind links isn't to simply have them, its to engage the reader and give options for more information. Hence the success of Digg and Stumble Upon. These sites do what the rest of us have forgotten. Its not just about page rank, its about providing users with valuable content they are interested in.
If more site linked out fewer people would rely on Digg and other aggregation sites.