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Link building is a tool that basically links back a specific topic, word, article back to your site which eventually helps boost traffic to your site. So basically, its one of SEO's tools to generate traffic to websites. Other tools would be affiliate marketing, social media marketing etc.
You can build links to your site by blogging, put RSS feeds in your site, ask visitors to your site to link you as well etc. You have a lot of options to generate traffic on your site and try to find the one that best suits you and you are comfortable using.
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