I agree somewhat with classics.
But if you’re targetting 5 different keywords, for example:
bird, birdy, birds, bird poo, and bird turds, you could then launch 5 different link exchange campaigns, and those webmasters could link to each website with different keywords. If you’re targetting bird poo, if everyone links to that site with the words bird poo you’re more likely to get a first page result than if you only have a subpage dedicated to this keyword.
But it’s a lot easier to manage one large website. Different webmasters feel differently, but you’ll find that most webmasters have more than one property.
From my experience google does not penalize sites for crosslinking, instead google seems to simply ignore those links. The links in other words have value for passing on pr, but when someone makes a search the cross links are not counted and you therefore get no boost in the search results.
Antoine