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link farms are those web pages that has lot(i can't define how many a lot means to search engines) of an external links which is not related to web page topics. but to google seach engine bot it has no problem and it will not penalize you if you are the subject of link farms(outbound link). pagerank was divided into how many links are in there in a single page. also it will not credit you in google serp since ranking in serp depends on quality and relationship between two linking page.
The moral is it was useless having a backlinks from link farms(e.g. link clouds)
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