Google ranks sites higher that have more ORGANIC imbound links. Why? Because Google figures that a site with lots of inbound links is important, popular, and relivant.
There is more to it than just this, but the algorythm that drives Google is a carefully guarded secret. Anyone who claims to know it or how it works is full of it.
As your site gets popular, and more people link to you, Google will notice and rank you higher.
Companies that create a bunch of bogus domains to link to you are not unkown to google. If the links are from BS places, or the context of the links is false, Google will push you to the very bottom of the list.
For more check out this link:
http://en.wikipedia.org/wiki/PageRank
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