Link building is an art. It's almost always the most challenging part of an SEO's job, but also the one most critical to success. Link building requires creativity, hustle, and often, a budget to work with.
In the past it was called Link Exchange and then in to Reciprocal Link Exchanges where website links were exchanged, you put my link on your page and I'll put your link on mine to increase Rankings with Google. This eventually became abused and turned in to Link Farming which in turn became Taboo with Google and for good reason. Although not completely banned by Google, but must be done legit. In short it's best to do one way linking with high rank websites with authority, the higher the better and they link to you and that's it. Below is some information on different methods of Backlinks.
Links that are given naturally by sites and pages that want to link to your content or company. These links require no specific action from the SEO, other than the creation of worthy material (great content) and the ability to create awareness about it.
The SEO creates these links by emailing bloggers for links, submitting sites to directories, or paying for listings of any kind. The SEO often creates a value proposition by explaining to the link target why creating the link is in their best interest. Examples include filling out forms for submissions to a website award program or convincing a professor that your resource is worthy of inclusion on their site.
Hundreds of thousands of websites offer any visitor the opportunity to create links through guest book signings, forum signatures, blog comments, or user profiles. These links offer the lowest value, but can, in the aggregate, still have an impact for some sites. In general, search engines continue to devalue most of these types of links, and have been known to penalize sites that pursue these links aggressively. Today, these types of links are often considered spammy and should be pursued with caution.
One of the best ways to determine how highly a search engine values a given page is to search for some of the keywords and phrases that page targets (particularly those in the title tag and headline). For example, if you are trying to rank for the phrase "dog kennel," earning links from pages that already rank for this phrase would help significantly.
MozRank (mR) shows how popular a given web page is on the web. Pages with high MozRank scores tend to rank better. The more links to a given page, the more popular it becomes. Links from important pages (like www.cnn.com or www.irs.gov) increase a page's popularity, and subsequently its MozRank, more than unpopular websites.
A page's MozRank can be improved by getting lots of links from semi-popular pages, or a few links from very popular pages.
Moz Domain Authority (or DA) is a query-independent measure of how likely a domain is to rank for any given query. DA is calculated by analyzing the Internet's domain graph and comparing a given domain to tens of thousands of queries in Google.
By examining the backlinks (inbound links) of a website that already ranks well for your targeted keyword phrase, you gain valuable intelligence about the links that help them achieve this ranking. Using tools like Open Site Explorer, SEOs can discover these links and target these domains in their own link building campaigns.
According to the original PageRank formula, the value that a link passes is diluted by the presence of other links on a page. Thus, all other things being equal, being linked to by a page with few links is better than being linked to by a page with many links. The degree to which this is relevant is unknowable (in our testing, it appears to be important, but not overwhelmingly so), but it's certainly something to be aware of as you conduct your link acquisition campaign.
Link building should never be solely about search engines. Links that send high amounts of direct click-through traffic not only tend to provide better search engine value for rankings, but also send targeted, valuable visitors to your site (the basic goal of all Internet marketing). This is something you can estimate based on the numbers of visits or page views according to site analytics. If you can't get access to these, services like Google Trends can give you a rough idea of at least domain-wide traffic, although these estimates are known to be wildly inaccurate at times.