Many people have heard of link wheels. These are a somewhat old (and black hat I might add) technique for getting ranked well. The problem is that all too often the advice that I see given regarding how to build them is either poor advice (such as doing it the black hat way) or just plain wrong. Fortunately, there's a way to do them that doesn't require you to go over to the dark side and risk Google penalties.
Often, as I stated above, link wheels are used as a black hat strategy. Now, Google doesn't like spammy manipulation of their search results. They hate it, in fact. So if you're going to follow the black hat approach, you've got to know that Google's algorithm is designed to try and find you and delist you. That's not really a great way to put together a long term business, in my opinion.
For those that don't know what a black hat style link wheel is, allow me to explain.
There are plenty of "user generated content sites" on the Internet that can rank quite well on Google for a variety of reasons (domain age, # of inbound links, etc). These are sites like Squidoo, Tumblr, Blogger, and Wordpress.com. The idea behind a "link wheel" the way the black hats do it is that you can throw a ton of junk content onto these sites, then add a ton of junk links to them. Because there are already so many links to these sites, Google won't find it strange that there's more, and even though the content is junk, it's still content and Google can't (yet) determine the difference between good content and junk.
The huge number of spam links, combined with the junk content, does (for a short while) increase the page rank of those sites, which you then link to your main site. Each of the user content sites has some decent PR, which is then passed down to your main site.
The idea here is that by linking out to so few sites, the PR that is passed is done so with a fair amount of strength. By obtaining a bunch of inbound links (often tons of garbage links in the black hat strategy) to these sites, you can "protect" your main site from the black hat activities of the sites in the link wheel, while keeping the great PR.
Now, that's a "traditional" black hat style link wheel. The thing is, doing it that way is actually (in my opinion) way too much work. As Google catches on to the black hat linking activities of one of your link wheel sites, it bans that page and you have to create another. You're basically in a constant foot race against Google. Doing things this way means that you have to stay one step ahead of Google, creating these junk, spammy sites faster than the search engine can find them and delist them.
Let's face it, Google is in the business of NOT ranking sites with crap content that have a ton of forum and blog spam links to them. So as Google finds these sites, new ones have to be created, each one as spammy as the previous site. I hope you aren't in the business of spamming people, blogs, forums, or the search engines.
Further, do you really want your business associated with junk content and blog spam?
Not only that, but to me that seems like an awfully large amount of work, especially since there is a much better way to go about it. You see, on the surface, everything that I've said so far might make it seem as if this strategy isn't useful for a real business. However, nothing could be further from the truth. Link wheels, implemented properly and "above board," don't have to put you in a position of fighting Google.
You can implement them in a way that not only won't put you in a foot race against the Google machine, but also helps to build your credibility in your market place (instead of destroying it the way a black hat link wheel could). Building a link wheel this way actually assists in a more complete and total domination of Google against any competition that you may have.
Google Optimization 
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