I have a customer, www.xxx.com.  This site has good traffic, low bounce rate (28%), 2:00 min avg time on site, and 45% return visitor rating.  No spam rankings, etc.  Good load time.

Another site, www.yyy.com, has sent out a request for them to add them as a new link in www.xxx.com's primary navigation - using a title such as "abc" (not the name of the company or site of yyy.com).   This second site, www.yyy.com, has a bounce rate of 98%, avg time on site is :30, and 10.2% return visitor rate.  No spam flags noted in Open Site explorer.  Plus they are asking other sites similar to www.xxx.com to do the same thing.

Questions/Concerns and Feedback appreciated:

1. Will yyy.com's analytics and quality pass back to xxx.com and cause Google or algorithms to flag or penalize xxx.com?  (It ranks #1 for quite a few things.)  The relevancy between the sites is good -same industry, same business objectives.

2. From a usability standpoint, isn't it more appropriate to place a link to another website in a different way? e.g. a promotional graphic wit a link or anchor text links?

3. Isn't it more appropriate to ask another business for links - not using the primary nav of a site?  (It seems yyy.com is essentially asking other sites for 'free advertising/promotion.'

Thanks!