The term Reciprocal Links refers to when your website links to another, and that website links back to your site. Reciprocal links are a very common form of linking, especially among sites with similar content and subject matter. Reciprocal links differ from inbound links, which are links that point in only one direction, from one site to yours.
Building links in general is a huge part of SEO tactics. Google's Page Rank system is determined mainly by the amount of links direct users on the internet to your site. The more links you our page, the higher your Page Rank, and Page Rank is a huge factor in determining your overall placement in the results pages for search engines. The same goes for the other major search engines.
But if you look into the issue, you'll find that many search engine optimization specialists seem to think that reciprocal links are inferior to inbound links. To some degree, this may be true, but before you pass judgment on reciprocal links, let's look at this issue a bit more deeply.
Research does seem to show that inbound links carry more weight in Google than reciprocal links when it comes to search engine optimization. An inbound link suggests the relevance of a site, while a reciprocal link connotes more of a deal being struck between two sites to share traffic.
However, this does not mean reciprocal links have no value. Value often depends on the type of reciprocal links. For example, if a website focusing on classic cars links to an interesting article on this subject at another site, and then sometime in the future that site does the same, that does not mean that reciprocal links suddenly don't matter. Reciprocal links of this kind happen all the time, because it is simply how the internet works. In reality, those kinds of reciprocal links will probably do a great deal to aid your Page Rank.
The kinds of reciprocal links that carry less value are the ones that simply link home pages to home pages. These are bland reciprocal links of little specificity and thus little value.
Similarly, reciprocal links garnered through a reciprocal links program are of very little value. Search engine crawlers will quickly pick up on the fact that these kinds of SEO tools are only serve the purpose of being a cheap and manipulative search engine marketing strategy, and they probably devalue those types of reciprocal links.
Keep in mind, it's not so much the type of link that matters, it's the quality of the link. Reciprocal links can be of very high value in SEO marketing, as long as they come from good sources.