Improving your page rank on Google relies on a combination of different factors, but one of the most well-known methods is to build links with relevant sites. The more sites which are referencing you, the logic goes, and the more sites your site is referencing, the better your page rank will be. So how do you know when to stop building links to avoid triggering a penalty from Google? The answer is this: If you are building your links properly, you will never have to cap the number of links on your website.
According to Matt Cutts, head of Google’s anti-spam team, “There’s no such thing as building too many links as long as you’re doing it in a great, organic way.” That pretty much explains how linking works and when it works. If your site is building links through relationships with other websites, then it simply does not matter how many links you are building. They will all help improve your page rank, and the only potential pitfall might be if those websites earn or have earned a bad reputation with Google.
However, it is important to note the caveats in Mr. Cutts’ statement. Perhaps the most important word in his statement is organic. Link spamming will get you nowhere, and doing a lot of it is more likely to get Google’s attention. If your website is using black hat linking techniques, then, it is fairly safe to say that Google will find out and your website will incur a penalty or ban because of it. The point of the statement, rather, is to reassure those who are linking properly that there isn’t some “red flag” number of links where Google automatically assumes you are link spamming.
So how much is too much linking? I would say that it is at the exact point where you would have to resort to black hat tactics to add more links to your website. Since Google does not see any specific number of links as more likely to involve black hat techniques than any other number of links, it is a good idea (and even encouraged by Google) to maximize your links as much as can be done without resorting to spam.