Why has this method of promotion gone out of favor? The main reason is the excessive spamdexing that webmasters indulged in. This is a fancy name for blatantly trying to cheat the search engines. These cheaters especially targeted Google as Page Rank lays heavy emphasis on popularity and links to your site. Here are a few ways that web masters tried to cheat the search engines:

- Buying many of them to falsely raise popularity.
- Collecting them (farms)
- Exchanging with anybody and everybody just to gain popularity
- Making dozens of small websites that will join with your main one and give a false view of your popularity.

Link exchanges can still be an effective way to get targeted traffic to your site. However there are a few points to remember.

1. Always choose websites that will be good resources for your visitors. They will be ones that are complimentary to your business.
2. Never join websites that have huge collections from anywhere and everywhere or collect these yourself. These websites are known as farms and can actually get your site banned by Google. Because of their vast number they will not bring you any traffic, as you will just get lost in the crowd.
3. Never choose random websites. These will not bring you good traffic and can even make your Page Rank drop with Google.
4. Make sure you exchange links with quality websites. This is important for your own business reputation and Page Rank with Google.
5. Categorize the URLs so that there are no more than 10 to a page. This will be fair to your partners as visitors can find them easily and use them as valuable resources.

As you can see link exchanges are not dead. You just need to adapt to get the best possible use out of them. They will not affect your popularity much but as you can see might affect your Page Rank due to the type of websites you are partnering with. With these few points you can still gain targeted traffic and sales by using this method of promotion wisely.