Link exchange directories are a controversial topic in the SEO world. According to Danny Sullivan (editor of SEW), Eric Ward is the top authority on link building. Eric Ward has been involved with link building since the late 90's and worked on Amazon. He states that link swapping is "almost" always a waste of time. According to Aaron Wall, author of the
SEO Book , he has a site that is ranking pretty relying solely on link swaps.
Putting the functional aspect of link building swapping aside, many believe that link swaps "take away" from the quality of a site. Linking to off-topics and random sites may look unprofessional. Most would agree that the goal of a site should be to serve the visitor, not the spider. IMHO, a link exchange directory is good, if you keep it neat, professional, and is designed to give value to your user. In my industry, I see local real estate agencies in rural America linking to sites in Turkey. You get my point.
In sum, if you do automate your link building process, make sure that you keep your links section organized in a fashion that primarily serves the visitor. Limit your directory to sites that are on topic.
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