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Both! In spite of the rash of Google updates and other covert maneuvers, link-building is still necessary for search rankings. Google has made it crystal clear that high quality content is what it wants. But Google is not quite so upfront about links. We do know that quality onsite and offsite content is just part of effective SEO. You still need to get those links. Link building tactics have changed and will continue to change in response to Google updates. Looks like another Google update is coming soon.