External links are those links that link outside of your domain to websites on the internet. Many web designers and content authors are reluctant to use them because they feel that they will harm their site in some way. Such as:

Customers will leave the site and never come back.

Search engines will penalize me if I link to "bad neighborhoods".

I shouldn't link to sites with lower PageRank than my site

External Links Lend Credibility

Unless you are already recognized as the foremost world expert on the topic you're writing about, chances are you got your information from somewhere else. And using external links to provide more information and references is important to show that your site has credible information. And a site with credible information is one that readers will want to come back to for more analysis and information in the future.

Don't forget, even eminent scientists provide bibliographies on their papers and journal entries. By linking to sites outside of your own site, you show that you have done the research on the topic and really do know what you're talking about.

Be Thoughtful in Your Choice of External Links

By linking to good sites with quality information, you increase your site's credibility. But there are some types of external links to avoid:

Unmonitored links (such as user-generated links)

Undisclosed paid advertising

Allowing your readers to post dozens or hundreds of links on your site will quickly turn off your readers and turn your site into a possible link farm which would get you penalized by search engines. If you allow comments on your site, you should moderate them to make sure that they don't include spammy-looking links. For example, some bloggers allow blog readers to post their URL in the URL field, but not to post more links to their site within the blog comment. They will edit those posts to remove the links.

Undisclosed paid advertising can be very annoying to readers. Savvy readers will realize what you're doing and be turned off by the practice. And other readers will just be annoyed when they click on them and discover not more information, but advertising.

It's best to add the rel="nofollow" attribute to all user-generated and paid advertising links. This will ensure that you're' not passing your PageRank to those sites, and help reduce comment spam. You should also disclose the links that are paid advertising. Many sites will do things like double-underline the ads, or highlight them in some way. Then if your readers want to click on the ads, they can, but they do so knowing that it's an ad.

Search Engines Won't Penalize You for Good External Links

Good external links are links to relevant sites that provide additional information about the topic. It's only when you link to spammy sites and link farms that your site may be penalized.

But it is true that search engines will penalize your site if you link to bad neighborhoods. These are sites that customers don't want to visit either, so linking to them is a bad idea even if you don't care about your search engine ranking. As the minute someone clicks on a link to a spammy site they will remember that you sent them there and your site will be branded a bad site by association.

Don't Worry About the PageRank of the Sites You Link To

While it's true that if you link to a site that has a lower PageRank than yours, you are lending them more credibility in the Google algorithms. But if the site is of high quality, that shouldn't matter. Google writes:

If you're linking to content you believe your users will enjoy, then please don't worry about the site's perceived PageRank. As a webmaster [you should be worried about] losing credibility by linking to spammy sites. Otherwise, consider outbound links as a common-sense way to provide more value to your users, not a complicated formula.

External Links Build Relationships and More Visitors

Many webmasters use external links to connect to other sites and webmasters in their field. You see this a lot in blogs. Many bloggers link externally all the time. And the more sites they link to the more sites link to them. Plus, when you link to other sites, they will see your site in their referrers list and that could start a business relationship or partnership between your company and theirs.

Ultimately, How You Use External Links is Up to You

We recommend that you consider adding more to your site. You might be surprised at what opportunities it provides and how your site improves because of it.