This was of great interest to me because we have had this discussion recently. Namely, how can you target an algorithmic based system at specific areas.
I watched an interview with Matt Cutts done by SEOMoz at the recent SMX conference in Seattle. The most insightful point in all 20 min was a discussion about how Google devalued what was a huge Reciprocal Link network in the Real Estate Industry.
A precedent was set early on where if I was an agent in say Cleveland with a site, I could easily exchange a link with another agent in Nashville. None competing markets, good for everyone. Well the link lists became massive. In May Google devalued all of them, but specifically focusing on the Real Estate Sites.
SEOMoz failed to ask the most obvious important question, how does Google algorithmically and fairly do that? Cutts implied that it was essentially found and studied by human review and they 'came to a decision' to do it. Additionally, this was a shot across the bow to all large scale reciprocal linking schemes. But most importantly, Cutts said that Google does focus and will focus on specific industries and can have different parameters for them.
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