
The goal is to obtain as much power in your website as possible. You particularly want more power than all websites competing for the same keywords for which you want to rank high. Website power can be increased in two ways, by having more people link from their site to your site, and also by adding more pages to make it bigger.
The number of links is not nearly as important as the quality of your links. If you get ten links from sites that are relevant to your topic, have a large amount of website power themselves, and don't link out to a lot of other sites, those links can be multiple times better that thousands of links from random directories or sites that link to whoever gives them a domain address.
The power of every page is also raised fractionally for every page that is added to the domain total. A bigger site continuously adding fresh content will accumulate more power in the long run than a static site serving as a brochure for the company it represents.
The words on the website tell search engines how you want to distribute the power you site has. Title tags tell them what each page will be about and the content on those pages should support the title. If you have more power than another site who wants to rank for that keyword, you will eventually overtake it the ranking. Internal site linking is another way to strongly indicate to the search engines which keywords you think are important to that page. The text you use to create the link describe that page to Google and the other search engines.
The crux of every search engine optimization plan is focused on increasing a website's power through page addition and link building while using that power as efficiently and effectively as possible with the structure of words on the pages.

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