Though some people will tell you that search engine optimisation is one of the dark arts of the Internet, it is not. Every search engine has to use what information it can to accurately rank each website.
The way they achieve this is really based on two key things, how your page looks to them, combined with all the information that they can gather about your site from all around the Web. They basically gather this information together as a popularity contest in that the way they rank you in their results is based on how many links there are all over the Web from other sites, pointing at yours. The site with the most links, basically wins.
In practical terms the search engines use a more complex algorithm than this as they can value each link to your site depending upon several factors such as; the PR value of the site/page that your link is on, the site title, the page title, subtitles & headings on the page, the text in your link, the page that your link is pointed to, whether you link back or not, to name a few.
You can be ranked above a site with 5000 links with only 500-700 links to your site if they are much better links of a higher quality. As search engines like Google advance technologically, they are increasing the amount of criteria that they base a link’s worth on. So to ensure that any link campaign you embark on is secured for the future it is best to start gathering high quality links as soon as you can.
Ideally, your backlink (the link pointing to your page from another site) should meet the following criteria; the site that the link is on should have a related topic to your site, on a page that has a title that’s similar to your keyword, th actual clickable text of your link needs to be the keyword that you want to be ranked for (this is crucial).
If you can get these links without having to link back to the site with the link on it then so much the better as it would then be a one way link that you had which is considered far more powerful than a reciprocal link where you link to each other.
You should change the keyword that you’re using for your link text every fifty or so links. This is because search engines have developed filters that can see if anyone has too many link to their site that say exactly the same thing, which looks unnatural to them.
Only add 100 links per month max to stay within the search engines strict guidelines, if they are quality links as I have suggested they will be doing your site lots of good in a short period of time so be patient always.