Links are connections that other sites make to yours. Sites will usually only link to your site if yours contains unique information such as research or statistics that they want to use in their content.
Site owners strive for links because search engine algorithms use inbound links to determine how much authority your site has. If you have a large number of links from quality sites then you will move up the search engine ranks. Beware though, when it comes to backlinks quality is more important than quantity.
The only way to get quality links is to produce great content. If your site develops a reputation for top grade content, other sites will link to it so that the readers of their articles can get to read yours too.
Those who have tried buying backlinks have found themselves dropping down the search engine ranks as it is against Google’s policy. The search engines will punish you if they pick it up. Google updates its search algorithm every day. Part of the updates include penalties for websites that break the rules. Google has two such algorithm penalties Panda and Penguin
Panda focuses on poor content that is too short or incomplete. Penguin looks for keyword stuffing and backlink irregularities.