Linkbaiting can increase your traffic by 300-400% within a month. Got your attention? Good. Reader further.
The best way of obtaining quality inbound links is generating lots of high-value content that people would like to link to. You gather inbound links when other webmasters and online publishers link to your website, or one of your pages. The more such links you can get, the better it is for your website and the higher you are likely to rank in the Search Engine Ranking Positions (SERPs).
Inbound links not only get you targeted traffic from the websites linking to you, even search engines attach higher importance to websites that are being linked to by other websites: it acts like a validation of your content. Valid inbound links can significantly increase your (SERPs).
The process of generating content for the sake of getting inbound links is generally referred to "linkbaiting".
But does linkbaiting imply that you generate content just to obtain inbound links? No. Actually everything works in tandem and although linkbaiting is a relatively new term, the concept has been there for more than a decade although prior to this it existed in a crooked form. Remember link-exchange programs? It was the same thing but back then (they still do) they used to exchange links indiscriminately. Nobody bothered about the value the link provided, as long a reciprocal link was put, every sort of link was welcome.
There was so much mayhem that it eventually led search engines to stop ignoring link exchange activities and considering only those links that were linked to high-value content. Therefore, arose the need to generate link-worthy content. This content not only ads value to your website and hence, improve your conversion rate, it also encourages the others to link to your web pages. This linking, originating out of the value of your content, greatly improves your search engine rankings.
http://www.acmearticles.com/Article/Link-Baiting-By-DoubleSpark-SEO/46191