Link Exchange Benefits
If the pages the exchanged links are placed on receive a lot of traffic it is possible that exchanging links will result in visitors. However, most link exchanges are done so that the site's increase in link popularity. By exchanging links with a link partner a webmaster is able to increase their number of inbound links without buying links since it is an even exchange.
In the past numerous webmasters exchanged links with each and every relevant site they could find. Some even exchanged links with sites regardless of theme. With the changes to search engine algorithms the popularity of link exchanges has dropped dramatically. While it is not known how much actual weight is given to an exchanged link it is thought that this weight has been reduced resulting in one way links being much more popular.
Three Way Link Exchanges
Another form of link exchange is referred to as a three way link exchange. A three way link exchange requires 3 sites. In this situation link partner A links to B but B links back to A from a third site C. This process is also referred to triangular linking by some. Due to a third site being needed by one of the link partners it is also more involved linking arrangement.