The top five search engines all put some weight on anchor text. Google currently uses it as a key factor and it is more important than on-page elements. Take the keyword:
cycles
This returns around 7 million search results in Google. A competitive keyword. The first result is:
http://www.raleighbikes.com/
If you look at the page source neither the word cycles or the stem word cycle are used in the page. The site has a page rank of 6, which is good but not excellent. We can use some special Google options to investigate further. If you search for:
allinanchor:cycles
Raleigh Bikes is again the top site, this time ranked on in-bound links containing the anchor text with our keyword. Filtering by url (allinurl), title (allintitle) and page text (allintext) and Raleigh Bikes is, as you might already have guessed, nowhere to be found in the first hundred results. This is very interesting and you can find similar results if you dig around a bit. To give you some other well known examples try the keywords:miserable failure, which, at the time of writing, brings George Bush's Whitehouse homepage up as number one or computers, which shows Apple at number two. Neither keyword is used in the page.
Miserable failure is part of a phenomenon called Google or link bombing. A group of individuals create anchor text linking to a certain page on the Web in an effort to bomb it to the top of Google's results pages. Google took a fairly benign attitude to Google bombing until some pranksters linked the phrase 'out-of-touch executives' to Google's own website. Google was quick to fix this particular example but left some loopholes. For example the phrase 'out of touch management' combines the highly ranked 'out-of-touch' anchor text with the word 'management' found on the page in question:
<www.google.com/corporate/execs.html>.
Demonstrating that a mixture of anchor text and good on-page features is still important.
It is amusing to note that neither Yahoo! nor Microsoft's MSN search engine felt it necessary to diffuse this particular link bomb demonstrating the power of anchor text on those search engine's results pages.
In early 2007 Google announced<1 > that it had made an algorithm change to difuse the majority, but not all, Googlebombs. Searching for “Miserable failure” now returns pages about that particular googlebomb but not the bomb itself. Google felt that the bombs were being represented as the opinion of the search engine by some users. Google says that bombs worked because they were for obscure phrases so other relevancy factors had less of an impact in the search results. By improving their analysis of the link structure of the web Google claim to have diffused the majority of bombs.