Hi,
I rasied a similar point and this is the answer I got back from LA support
> Creating a link submission form and making part of my link directory page ? Surely this is a very BAD idea - wont Google then view my site as a link exchanger / provider and penalize my site ?
No, it won't. Google will never penalize you just for having a link submission form on one of the pages of your website. You are running a risk of being banned only if you set fully automated scripts because in many cases they will link you to irrelevant sites in a high volume manner. But you focus on link exchange with relevant websites at moderate tempo and natural volume it will raise no suspicion with search engines. Moreover it will be beneficial for your link building campaign and will finally result in higher rankings in search results.
Please read the interview with Matt Cutts to learn more about link exchange:
http://www.stonetemple.com/articles/int ... 1608.shtmlThis forum thread can also cast some light on that:
http://www.webmasterworld.com/link_deve ... 151507.htm