How to Deal with Link Farms
A link farm is a group of unrelated Web sites that each have hyperlinks to all the other sites in the group. This is spam because it’s a fabricated collection of links connecting pages for the purpose of inflating search engine rankings.
Link farms are designed deliberately to increase their link equity, which is the combined value of all the links pointing to a page that is part of search engines’ ranking algorithms (formulas for determining which Web pages are the most relevant to a user’s search query). Search engines try to identify link farms and filter those links out of their calculations, and may even pull these sites from their index in order to keep them from affecting search results.
There is no way for a site owner to verify that link equity is being passed. High PageRank pages that link to your page may actually not be passing link equity if the search engines consider it link spam or the site to be part of a link farm. To avoid link farms with your own site and deal with them in your industry, you can do the following:
On your own site. You want to encourage links from quality testimonial-grade Web sites and avoid links coming to your site from unethical sites, such as sites involved in link farms or other types of spam. They can seriously harm your search engine rankings by association. Now, you can’t actively stop someone from linking to you. However, you can avoid requesting links from these sites, and if you have been linked to by a link farm, you can send them a note asking them to please remove the link. The best links come from sites that strongly relate to your industry or to what your Web page is about and that operate ethically.
On other sites. The search engines generally do a good job combating link farms, but if you find that another site participating in a link farm is still ranking, you can report the site(s) as spam. Never, ever link back to a link farm page. As a willing participant, you are subject to a penalty.