Does placing links to related sites improve rankings?

As google says that their motive is to provide better information to people, I think they give weightage to links to related sites as well.

For example many pages in wikipedia have links to .gov or .edu sites like say 20 links per page. This is because wikipedia tries to provide more info to people. And the pages rank well.

Has this something to do with the .edu or .gov links on the pages? I know that wikipedia has many back links but I still wonder if the .edu or .gov links have something to do with it.

Outbound link have no effect, Apart from the anchor text used will be considered as text on that page.

If they had a good effect everyone would just link out to great sites, Anyone can do that, So why wouold google think it's a sign of a good site?

Directories would be PR10 by now.

I disagree Matt. You're right that linking out to related sites isn't going to give you a great boost, but linking out to trusted and related sites can help place your site in their neighborhoods in a sense. Not a hige effect on ranking, but if the sites you link out to are trusted sites your own site will get a little trust boost.

I also think if you use good anchor text you can benefit a little from that text. That anchor text helps pages on both sides of the link. Probably more for the page that gets linked to, but also some for the page doing the linking.

Not necessarily big gains in ranking for the page that adds the links, but some.

Stan I think those Wikipedia pages rank well because Wikipedia is considered an authority site. I don't think it has anything to do with the links on the page. They have so many pages and so many links into the site as a whole that just about any page you add to the Wikipedia will rank well for somethng quickly. The number of links pointing into the Wikipedia site far outweigh any marginal stuff they do on a page.

I'm not too sure it would steve. The way i see it, You have to be invited into a good neighbourhood by having good sites link to you. It's a bad neighbourhood you can find yourself in by linking to bad sites.

I would say outgoing links can't improve your site, but can make it worse, And the reverse would be true for incoming links.

It's one for Matt Cutts next time he does a grab bag video

That would be a good question for Matt Cutts. I can't say for certain it will help, but I would think it would even if slightly. I think Google will look at all the sites you link out to. Maybe it is just a case of linking to untrustworthy sites puts you in a bad neighborhood so you should only link to good sites, but I do think a little of the reverse is true.

I think having those trusted sites link to you is a better way to find yourself in the good neighborhoods, but I do think you can improve the standard of living of your site by linking out well.

I do think having the keyowrds as anchor text helps since I think all engines give a little more wieght to words that are in links. It probabky does more good for the site being linked to, but I still think the page that is linking out gets an on-page boost.

It's an interesting topic either way. And I'm sure we both agree you still want to link out to quality trusted sites and not untrusted spammy sites.