An active link building campaign should be part of every site's SEO / SEM strategy. You don't have to continue looking for sites to request links from forever but you should spend some time on it as soon as the site is finished. It is just as important as submitting your site to the engines (maybe more as the engines will find you if you're well linked to but may reject your submission if you're not).
What is link popularity? Link popularity is a general term which means that the engines look at how many other sites are linking to yours, what content those sites contain, how many sites link to them (ie: their link popularity) and what the anchor text in their link to your site says. The engines then "score" your site based on this information. In reality it's a lot more complicated than that but the all important thing to remember is that it's not the quantity of inbound links but the quality of the sites linking to you (and how relevant they are to your site) that counts.
What is link spamming? It's bad, that's what it is. Seriously now: link spamming is when a you try to artificially inflate your link popularity. There are a variety of ways to do this from link farms where hundreds of sites have the same links page on which they all, regardless of their site's content, link to each other to weblogging to creating loads of mini sites just for the purpose of linking them to your main site.
Believe it or not search engines can and do find out about these sorts of things and have penalised or banned thousands of sites for them. Now forget the engines for a minute: if you secure inbound links on informative sites you are going to get qualified traffic from it whereas link farms or weblogging won't bring you any. Why waste all that time and effort on doing something that the engines will just penalise you for sooner or later when you could be building links to gain both higher rankings and a steady flow of interested visitors.
How to find suitable sites The most common ways of finding good sites to request links from are:
check out who's linking to your competitors - you might find sites that will link to you as well
do a search for your keywords and see what sites are in the first few results - they might be good link partner candidates
get links from Yahoo, the Open Directory, regional and industry specific directories and trade association sites
find categories on Yahoo and the Open Directory covering relevant topics - go through all of the sites listed as at least a few will be good candidates for your link campaign
I highly recommend that you read, in full, the excellent Search Day article 131 (Legitimate) Link Building Strategies.
Eric Ward's Link Building Articles
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