Webmasters and SEO people have been aware for at least 15 years now, of the fact that with search engines, about the only clue they have of knowing how important a site is, comes from finding out what other websites out there think of them. If your website is a good enough that they will link to it, that's good. In their own way, the search engines have brought a kind of democracy to the whole search engine ranking business. The more people enjoy the content on a website, the more they will want to talk about it on their own websites, or at least on Facebook. When they do that, they'll have to put a link in there, and that's the vote of confidence that the search engines are looking for. To the professionals who work hard at trying to make a website popular, link building in SEO is the Holy Grail. At least for now, until the search engines find a more effective way o rank things, this is how rankings are achieved.
To the search engines, it's a very powerful method to look at the links that come to you. When many famous and well-respected websites take the trouble to put a link on their website to your website, it's a pretty powerful vote of confidence. By studying each link from anywhere on the Internet that points to your website, the search engines are able to draw a pretty accurate picture of how important you are.
Before you actually set off with some link building SEO, you really need to understand how the the search engines look at those links. You need to really understand that not all links are the same. Not even close. In fact, this whole thing about how to value each link that comes to a site, was a core part of the Page Rank algorithm that Google's founders wrote way back in 1997 to power Google with.
To begin with, every link that everyone gets is treated as equal. And so, whatever page out there received the most links, made it to the top. This was simple enough. As word began to spread that this was how Google operated, professionals whose job it was to study how these things worked who called themselves SEO professionals found all kinds of ways to make use of this in unnatural ways. The body of knowledge that they developed for how to get more links to a website that hired them, came to be called link building SEO.
Of course, it's a cat and mouse game. As soon as Google learns that SEO professionals are actually on to them, they refine things still better.
One of the first rules was the higher up in the HTML code of a page that a link to another website appeared in, the more important it made the link-receiving page. Google actually has a patent on this way of ranking pages for importance.
The next rule was that if the title tag had the keyword right at the start, that kind of linking was more important.