Link networks are groups of websites, usually with related content, who agree to link to each other. Often there is a monthly membership fee which can be very expensive. Usually, there is some sort of exclusivity, where there's a limited number of spots in the network, and each spot is available for purchase.
Web Rings
The earliest and most trivial link network was a "web ring." When the internet first started, web rings consisted of two links at the bottom sites, one link forward and one link back to different sites, usually with related content. So, you might have found a web ring about a certain celebrity, and by clicking through the ring, you could visit hundreds of sites about that celebrity. Some of these were membership based, but most of them were free. It was the internet's first exercise in link networks, and those of us that were around at that time have a bit of nostalgia thinking about them.
Link Networks Today
As the internet grew as a tool for business, more sophisticated link networks were formed, and still exist today. For instance, real estate agents may join a link network where they are the single link for "New York City." They put links to every agents from each of the other major cities, who in return put links to them.
We're big fans of these types of link networks. They've proven to be effective at increasing both web traffic and search engine placement. Their links are highly relevant due to the related content between sites. The biggest drawback is that they can be expensive and they can be hard to find and get into.
Create Your Own
The good news is that you don't have to go looking for a link network that fits your site. You can create your own! By creating or joining a LinkFamilyTM network and inviting other related sites, you create your own "industry-specific" link network. But, unlike existing link networks, you don't have to place hundreds of links on your site. Also, your network will continue to grow exponentially.