Analyzing One-Way Vs. Reciprocal Links

Link building has become a cornerstone of SEO/SEM services so many are interested in knowing what makes a good link, what they should strive for, etc. that will provide the biggest impact on their site optimization.

I was recently asked the following:
"These days, I've heard alot about one-way links being better than reciprocal and worth more in respect to pr rankings. If possible, could you please offer me some insight on reciprocal vs. one way links."

Here was my response:
"We certainly believe that one-way links are better than reciprocal links, but not to the extent that many others assume. You hear a lot of talk about reciprocal links being dead and for a while we believed this is the direction the search engines were going, but the more research we did the more we believe this NOT the case.

"The factors that we look at as being the most important are link relevance and quality. If these issues are in line then it’s not going to matter if it's a one-way link or a reciprocal link... just a valuable link."
Search engines certainly want to get a handle on link manipulation but there are many more effective ways of doing so. In fact, many believe the most recent Google algorithm change is the implementation of how links are viewed, and it has nothing to do with one-way vs. reciprocal links.

When analyzing links, determining if a link is reciprocated is not an entirely effective way to gage the users intent. Many sites link back and forth to each other simply because it makes good business sense to do so. If all reciprocal links are devalued search engines are essentially shutting out legitimate links simply by assuming that the intent was ill-formed.
Yes, a large portion of reciprocal links are simply SEOs and site owners manipulating the system, but that in itself isn't necessarily bad. After all, Google claims to have spidered over 8 billion pages. I'm sure its the grand link building campaigns and site cross-linking that has allowed them to find a few of those billion. The bottom line is that just because a link is reciprocated does not mean that it's an illegitimate relationship.

Search engines can determine link quality by a number of other measures:
Comparing themes of the link source and link destination pages
Placement of links on the page (i.e. is it in body content, ad section, navigation area, etc.)
Relatedness of the two linked sites (are they in compatible industries?)
These three measures alone will provide a far greater measure of the quality of a link than looking at whether a link is reciprocated or not.In regards to links, and SEO in general, I don't believe it makes much sense for search engines to look for ways to penalize those who are manipulating the system to their advantage, but rather to make sure that those manipulations work to provide higher-quality search results.