One of my readers asked,
What is 3-way link Building?
Quick look at Reciprocal linking
Before we jump into 3 way link building we need to look at reciprocal linking.
With reciprocal linking site #1 links to site #2 and in return site #2 links to site #1. Both sites link to each other and benefit from the free back link.
It didn’t take very long for the search engines to catch on to this game. They are now able to detect this kind of linking and when they find reciprocal links they will assume that you are just trying to game the system.
Because of this reciprocal links are not nearly as effective for search engine optimization when compared to one-way links.
3-way link building
When people realized that reciprocal links weren’t very effective they changed what they were doing to include 3 websites instead of 2 for their link exchanges.
For example: Site #1 links to Site #2, and Site #2 links to Site #3, and Site #3 links to Site #1.

This kind of linking structure makes it more difficult for search engines to detect reciprocal links and your links look a lot more like one-way links.
Can search engines detect 3-way links?
If any search engine could do it would probably be Google but I honestly don’t know if they are able to.
I wouldn’t be surprised if Google could but I don’t think they would ever tell the public about it.
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Thanks for th eanswer, Nick! Much appreciated.
>>when they find reciprocal links they will assume that you are just trying to game the system<<
Why do you think reciprocals means 'gaming the system'?
The web was built on the idea of sites linking to each other, so reciprocal links are something natural.
Also it is said, that some of the big SEs can analyse if the sites linking to each other are related on topic, which would help increase the quality of a link. So, when I run a site about widgets and link to sites about red, blue, green and yellow widgets, a reciprocal link from them would not be harmful, because it is on topic.
Links are like votes. The more links you get the higher you rank (in general). People figured this out and started reciprocal linking. They would contact 50 or 100 different website owners for the express purpose of trading links so both parties could rank higher in the search engines. Google caught on to this and began devaluing reciprocal links.
They may not bother with 3-way linking since it should not impact much on the quality of search results IMO since users of this kind of linking will be more selective of who they link with maybe?
But with reciprocal linking, it was more about emailing every site webmasters could find to exchange links with and using plugins to automate it.
I prefer to one way link building. It is the most effective form of link building. 3 ways is good if one way is not possible but less effective. Due to this it is not getting popularity.