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Anchor Text
Anchor text is the linked text to a web page or document. It carries a large importance in SEO terms to the quality of an incoming link to a web site. If the anchor text in a link to a web page on the topic of SEO contains the term "SEO", the link will be of greater value than if it simply read, "click here" or another irrelevant phrase. Descriptive anchor text can also be more helpful to visitors.
Search engine algorithms look at anchor text as a factor in rankings. The text should accurately describe the page the link is pointing to.
Anchor text is also important to human eyes. A person's view will naturally gravitate towards linked text so there is an opportunity to use descriptive text with the intention of guiding web site visitors towards certain pages for a specific purpose.
There is also the unfortunate habit of some poor SEO's to include repetitive words within anchor text on a page. This serves no purpose for search engines as over-optimization and keyword stuffing is looked upon negatively. It also gives your visitors a headache when trying to navigate certain areas of your site.
Anchor text can be a very important tool for SEO as well as web site performance if used properly.
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