Finding Out What the Major Search Engines Really Think About Link Exchanges
Neither Google, Yahoo!, Ask, or MSN has ever advised web operators not to exchange or reciprocate links. They recognize that in many instances a site won't give a link if they cannot get a link back and that link exchanges are a classic web-based marketing method that has been around longer than they have.
What they have asked webmasters to avoid are "excessive" and "irrelevant" link exchanges. Software or services that force you to link in high volume with no editorial discretion on who or what you're linking to typically produce both "excessive" and irrelevant links.
You can avoid violating search-engine guidelines against excessive and irrelevant linking by using an editor-based link management solution such as LinksManager, which is specifically designed to facilitate relevant, natural/low volume link exchanges that benefit end users.
To learn more about what link building professionals have to say on this matter, see: