The WebmasterWorld was named "It's Official: Google Discounting Reciprocal Link Exchanges" by martinibuster to spark some top notch discussion. Based on the last paragraph of the Google post, martinibuster writes;
Within a recent Google Blog post about bad linking practices, the author lumps reciprocal link exchange tactics alongside paid links. The author does not qualify the statement against recips by singling out non-relevant or aggressive exchanges. Neither does it make a distinction between relevant link exchange or free for all link exchange. The blog simply references the exchange of links.
After a few pages of debate, Adam Lasnik of Google came in to try to clear things up from the Google perspective. In post number 3191649 Adam said;
This is a lot of speculation about reciprocal linking in response to an official blog entry, when there's not even one mention of "reciprocal" on the entire page ;-). Take a step back, look at the bigger picture, take a deep breath!
Honestly, Adam, I think the words "exchanged links" is pretty much the same as "reciprocal linking." But that is here nor there.
Over time and with lots and lots of data (and very handy tools for crunching it :-), it becomes more clear to us at Google what is "natural" (or organic) on the Web and what is not. We aim to reward the former, discount the latter. Take that as a broader SEO strategy statement if you will... it's not just about links, and it's DEFINITELY not all about reciprocal linking.
As Adam says continuously, it is about the patterns Google sees in your site and niche around it. Google is a different beast, it used to be before Adam was hired.
But more recently, Google has tremendously refined its link-weighting algorithms. We have more people working on Google's link-weighting for quality control and to correct issues we find. So nowadays, undermining the PageRank algorithm is likely to result in the loss of the ability of link-selling sites to pass on reputation via links to other sites.
That is what makes it harder to play with the Google SERPs. Google can now trust-less a particular link, assign less "weight" towards a link.
Forum discussion at WebmasterWorld.