Search engine ranking of a website is largely dependent on its link popularity. Search engines evaluate link popularity on the basis of quality and relevance of links as opposed to just the number of inbound links (link farms). A link from a site with a Google PR of 0 or above is considered beneficial. In addition to the PR of links, industry (theme) relevance is also given high priority by search engines. Links from the relevant theme websites are considered beneficial.
Link farm sites do not meet this criteria; neither are they related to any particular theme nor do they have any Google PR. A website containing large list of sites hyper linked to different websites without any theme relevance is a link farm website. Link farm sites do not have any content of their own and they do not follow any standards for link submission.
Link farm websites are poor quality version of normal link exchange websites; Normally link exchange websites exchange links following a relevant theme and also provide some information/useful content to the visitors. One might think that adding loads of links through link farm site can help in improving sites ranking in search engines. However, in reality, link farm sites are the sites penalized by search engine and do not have any PR. So, one should avoid adding one’s site to such web sites.