What you need to be doing is focusing on linking to similar high-traffic, quality sites, which will interest you visitors and which complement you site, not compete with it. Sending visitors to a competing site with a similar product is a big mistake because chances are they'll buy your their product.

Try not to down-link which is what I call it when a site links with a site with far less traffic than it. Always aim to up-link with a few high traffic sites, rather than a bunch of low traffic sites. The results are much better.

My favorite and first thing to do when looking for sites to target is to try a take traffic away from my competition, I do this by visiting altavista.com or any other engine which will tell me which sites link to which.

Say for example you knew your competition was WWW.XZY.COM, you would go to altavista and type in link:competition.com (leaving out the http://www. part). So to follow the above format you would type in link:xyz.com and do the search, altavista would return all the sites in its database that link to www.xyz.com. These are the first few sites you want to link to because you know they are sending traffic (and business) to your competition and you want a piece of action too. Chances are if these sites link to your competitor they will link to you too.

Depending on the industry of your business and your competitor, he or she could have hundreds of links, so be prepared to be held up for quite some time. However it's well worth it because you are effectively taking visitors away from your competitors site by having you link wherever their link is.

The next way you can target sites to link with is by visiting one of the major search sites, either Yahoo.com or Google.com. The advantage these two sites have over other search sites when it comes to targeting links is that usually results from these are of a very high standard. In Yahoo.com's case it's because all sites are reviewed by a human editor, and in google.com's case it's because they use link popularity as one of the main factors of relevancy when returning results from a search, meaning only good quality sites are returned.

So you're on either google.com or Yahoo.com, now enter keywords and keyphrases which relate to the theme of your website, remember you don't want to link to competitive sites so try not to be too specific on your search term. For example if I was doing this I wouldn't enter 'Internet marketing articles' because chances are most results would be competitive sites, I would enter in 'Internet marketing' because it's a wide area but still which is related to my website theme and not necessarily competing with me. The sites that show up for these results are prime targets. Ask for links with these guys, next you can target the guys who have links to them. The possibilities are endless.