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One bad apple can spoil the whole bunch. Link exchanges should be approached with caution. If you link to a company that does not comply with ethical linking standards (or they link to you), it can hurt your website. It can never hurt, however, to get the facts and perform some tests before you agree to a link exchange. It is important to note that link exchanges in general are further down the link power chain. They are less influential to your listing positions in the search engines.