How can a site rank better in Google?
Let us understand this with an example. Suppose you have a real estate related website and say it has a page rank of 5. Someone comes to you and seeing that your site has a page rank of 5, ask you to link his/her jewellery related website from your real estate related website and ready to pay a decent amount for doing that. You being in need of money accepted his proposal and linked his jewellery related site from your real estate website. Now, what is the connection between real estate and jewellery?
If someone makes a query in google for some real estate related keywords and land on your website and see the jewellery links there, will that be user friendly? Users (site visitors from google) won't find those jewellery links as useful because they are looking for real estate related information when they made a query for real estate related keywords in google. This even harms the reputation of google as being one of the most used search engines, when their users are not happy with the search results. Here the buyer just bought link for page rank and didn't consider relevancy. Even an idiot can understand that link was sold as it doesn't look natural and relevant at all. So Google doesn't need to check your paypal to declare that the link was bought or sold. They would simply penalize your site for buying or selling links.
On the other hand, if you could make the link look absolutely relevant and natural there is no way google could detect if the money exchanged hands. In that case, google would give you the benefit of doubt and your website will be declared ok with the links and it will do better in google search results. So don't hesitate to acquire links from other websites even if you need to pay a small amount for them but make sure those links look absolutely natural and relevant. Your site won't even rank higher in google and page rank will come to it, if the links are not relevant. The time has gone now when page rank used to flow from one website to another website even without relevant links.
Also don't remain like a coward and just sit and relax thinking that someone would link you naturally. If you have a high quality site with compelling content than people would actually link you naturally once your site rank higher and visitors are coming to your website through google organic but unless someone knows about your content how would they link to you naturally? So initially you will have to build links for a new website. If you are too honest not to go with manual link building than start marketing your website on social networking sites like facebook, twitter, linkedin etc. As more and more people would read your content, someone may link you naturally but that is really difficult but still possible with rigorous marketing. From all the above you read, it shows paid links still work but you need to do it very very cleverly and honestly.
Suppose you want to rank higher for keywords related to marbles than don't even get a link from flooring related pages but get the link from exactly marble related pages. This would work great. Don't go over page rank but go over relevancy. You don't even need to use any keyword as anchor text if there is a perfect relevancy. You could use your domain name or company name or use a keyword along with your domain or company name as anchor text. Exact keywords in the anchor text are being frowned upon by google as that signifies links were build manually and not acquired naturally.
Another important thing is the quality of the content on your website. If the users don't take any interest in your website and simply bounce and go back to google (after pressing the back button on their browser) as they land on your site pages, than you could be in deep trouble. Even the high quality and most relevant links won't help avoid google penalty if your website content sucks. I have written more about this in the article why need to be careful while making site for google. So your site can do well and rank better in google only if you do SEO and link building correctly.
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Edited by: Rajesh Bihani ( Find me on Google+ )