Ok, lets assume you are a health services provider like maybe a health clinic. As part of your business you deal with other business in the medical industry. As a benefit to your visitors, you place links to their web site pages on your website. Is this a good idea? Does this "service" benefit you.
While is sounds like a nice courtesy, it is not a good idea. You will be giving up Page Rank with nothing in return! Go ahead and perform this service, but be smart about it. You are gaining nothing by linking to another site if it does not link back. Another approach to take is to include those links with the "nofollow" attribute which tells SE's that the link is NOT a vote by your site for that site!
Link Content Is Critical
This is critical because Google and others have decided that they can't trust you to be honest about your site! Basically, it seems like there are two web groups - those who know very little about how things work, and those who know more than they should.
The group who knows more than they should will manipulate every available loophole to dominate search engine rankings, at the expense of those who have yet to read how to do that. Therefore, Google decided that its essential that there is some external correlation between what YOU say your site is about, and what OTHER people say your site is about... This is done by analysing the words in the Link Title on all links pointing to your site. if a keyword phrase does NOT appear on links to your site, you aren't gonna rank for that phrase!
For many established sites, this is one main reason they might have experienced a noticeable decline in rankings in the last few months. Most older sites will have a majority of incoming links based on their business name, and NOT on their business activity. To use the common "widgets" analogy - if you are selling "widgets" and all your incoming link Titles have only your business name e.g. Jones Manufacturing Co Ltd, it's now very difficult for you to rank for "widgets"!
Backlink analysis reveals this shortcoming rather quickly and, lucky for you, it is possible to remedy this by building 1-way incoming back-links using multiple Title / Description combinations that contain a good spread of relevant keywords. It does require some keyword research, and it is tedious - but if you don't do it, you are certainly not going forwards!
Link maintenance can be tedious. One thing we offer at Art Sprague Consulting is that we will place relevant links to your site from some of our self owned content sites.