Link building is a marketing technique that has been used for quite some time. Historically, a website could get links on any other site and this would help to push them up the rankings but this is no longer the case. Links do still help with your rankings but they are no scrutinised more and only certain links will add value. Google says that links should be built up naturally, so if a website thinks your business is good they will naturally want to link to it. Over time these links will build up and help to push your site higher up the search engines. Google sees links as a popularity vote for your site – if lots of people vote for you, your site must be good so Google will recommend it by pushing it higher up the rankings.
When doing link building of any sort it is important to be careful. If it appears that you are trying to falsely get links then it could be seen as spam and your site could actually be demoted rather than promoted on the search engines. If in doubt always ask a professional marketing expert their advice rather than trying to go it alone.