This is part 2 in a series of posts exposing some of the more common "get rich quick" schemes people use on the Internet. Check out part 1, Keyword and adsense arbitrage.

How to make money on the Internet:
Part 2: Linkfarming

Ever wonder how Google chooses which sites to put on the first page of its search results?

It's actually not that complicated. At a very basic level, Google looks at which websites get the most links from other websites, and then says to itself "Hey, if all these thousands of people are linking to this guy, he must be pretty good". Hence, those websites with the most incoming links ranks highest on Google (Ok, this is an oversimplification, but this article isn't about SEO)

So, if one could command thousands of links on different website, one could - hypothetically - place any website they want on the first page of Google search results. Hence link farming was born.

Link farming is the process of creating a large quantity of websites (sometimes in the tens of thousands). Because it would be prohibitively expensive to actually create tens of thousands of websites, link farms are usually created with an automated process, which copies ("scrapes") content from other websites (Such as Wikipedia or Yahoo Answers). Advertisements are also place throughout the content as well, so the website can be monetized.

But an advertisement is useless if no one sees it / clicks it. Aye, here's the rub:

Once these thousands of websites built with copied content are created, they are then interlinked to each other to increase their "authority" in the eyes of the search engines.

So to review, thousands of websites are created using copied content embedded with advertisements. The "authority" of those websites is artificially stimulated via interlinking, thereby allowing them to appear fairly high up in search engine results page. Hence, they get visitors (as people may search for the content which was copied), the visitors see the ads, and the link farmer gets paid.

Another method of link farming is to use the farm to increase the positioning of a legitimate website. In these cases, advertisements are not necessary put on the link farm sites. Instead, each site has a link to the one external website which the linkerfarmer wants to increase the search rankings for.

How much money do people make from link farming?
Link farming used to be significantly more profitable than it is today. The major search engines have all adjusted their algorithms to make it more difficult to maintain a profitable link farm. That being said, due to the rising popular of text link advertising, many link farms are getting a revival, generating thousands of dollars per day.

Are link farms bad?
Like adsense arbitrage, link farming makes the Internet a worse place for everybody. It's also fairly easy to catch, as most link farmers do not have the resources to spread their websites over a large number of unique IP addresses, making it easy to identify them as "part of the same network".

Another issue with link farming is the "value" of a site's link is determined by that sites popularity: one link from the Internet's most popular site is more valuable than 1000 links from the least popular. Therefore, a giant link farm alone may not be enough to get to the top of the search engine result pages.

Finally, link farming is plainly against the rules of all the search engines. If you're caught, your website will get banned. With many alternative link building methods available, link farming is not the most effective way to increase the popularity of your website.