1. Has the page been cached by Google? This is the most important criterion for determining whether or not it's worth exchanging links. If Google doesn't know it exists, then there's no sense in exchanging links, because if Google hasn't cached it then it's likely completely useless to both humans and search engines. And you don't want to be associated with that.

2. Relevance. This is another key question. If you discover that it isn't relevant to your topic, then it had better have a lot of other things going for it before you offer your link. The same goes for relevance to your search phrases. If it's not, then it had better stand out in every other way.

3. How it is optimized? Believe it or not, some websites out there are actually optimized for the words “reciprocal links” and “link exchanges.” Talk about showing your hand. Don't bother with these sites.

4. Is it part of an automated script? If so, you might as well just tell the search engines that your site is so bad that you can't get your own links from other quality websites.

5. Prominence. Let's say that the website you'd like to exchange links with isn't guilty of any of the four previous issues. Now it's time to start looking at the nitty-gritty, like how easy it is to find the page. How many clicks does it take to get there from a directory? If it's two or more, it's time to find another page to exchange with.

6. How many clicks deep is it? The further away it is from the homepage, the more you're losing value from the link.

7. Quality. Overall website quality is definitely a consideration. Does it look like a site that you and potential customers would trust? Does it look professional? How does it rank for keywords that are similar to the ones you hope to rank for? Are the categories contained in the directory at least remotely related or are they completely random?

8. What kind of page is it? A link from a page full of content might compel you to look past many other egregious issues, particularly if the content is well-written, relevant, and helpful to visitors.

9. How many links are on the page? A good rule of thumb is to only use pages with 50 or fewer links. If there are more than 50, at least make sure that your link is close to the top of the page.

If you're new to SEO and internet marketing, learning your way around inbound link building can be tricky at best. If you're unclear about the best ways to build inbound links, consult with an SEO expert or internet marketing professional. They can help you determine how and when to go about building your links, and they can help you create an internet marketing plan that will take advantage not only of link building, but of a number of SEO strategies that can increase your search engine ranking and help you turn visitors into loyal customers.

The only real mistake you can make is trying to solve the SEO riddle by yourself. Your competitors are using a whole bag of tricks to optimize their websites. If you're not, then you're losing potential customers, potential revenue, and the chance to make your business the best it can possibly be.