Or should I title this 'How a bunch of scum bags are destroying the Internet'.
First of all lets get our 'terminology' correct.
Link Farms - Worthless web sites that are just links to real web sites.
Dead end Link Farms - their links go no where. The oldest I remember is motherboards.??? They just had a list of motherboard models down the middle of the page and lots of adds on both sides of the page. The adds were for adult dating sites or worse. The idea is that you are looking for help with your motherboard and you end up there where they will sell you help with your sex life. Of course the advertisers were paying for referrals to their web sites.
Circulatory Link Farms - Their links go in circles. Like if you misspell Staples you will find one, then you will go in circles that go nowhere.
Live Link Farms - These somehow follow sites like Ebay and create pages of links to live Ebay stuff. How it works is that you are on Ebay and see something that you might like. So you then Google the device name to get more information. However the first ten pages of links all go to sites that in turn link back to the the Ebay ad that you started with!
Real Link Farms - These have real links to pages that you were looking for in the first place. You might call them a 'monkey in the middle' Link Farm. What is the point, if they did not exist you would have gone where you wanted to go in the first place.
PDF Link Farms - these scour the web for PDF files, then they sort them and then they create web pages of links to these PDF files. These mess with Google's ranking by skewing search terms towards the pages with the pdf files because 'linked pages' are rated higher by Google.
All of these link farms have one purpose in mind. To get you to see their advertisements for 'Pay Per View' or 'Pay per Click' so that they can make money off your searching usually without giving you want you wanted.
The other day I came across one that really 'got my goat' I was searching for some SEO help and I noticed that several of the sites all went to the same web site in one way or another. So I was talking with one of their salesman and he said that they own over 1,000 domain names that have only one page and they in turn all point to their 'real' web site.
So there it is, follow these terrible examples and you too can be the next Internet millionaire!