Internal links are the references given to different pages within the website.
Search engines will count these internal links or references from different pages to a specific page, say A, as impressions to page A which that they would like to rank or eligible to rank. Search engines consider those pages with relevant impressions to a specific page A from different pages or internal links should be relevant to the page A topic or contents of the topic.These internal links tend to bring lot of relevance to Page A provided the anchor text & page contents of the sources from which page A received impressions should also be relevant to the contents in page A.
Example: An Insurance Page with several internal links from Movies pages may not be very relevant to the contents of the Insurance page though the anchor text used is related to the contents of the insurance page. Hence it's not just the internal links are sufficient but the contents/theme of the page from which Insurance page receiving the internals does matters quite often.
Google measures these internal links and list them under Search Traffic > Internal Links in google webmaster tools to help the webmaster to quickly analyse the page links and make changes and help to maintain the website themes hold very tightly especially the website host content of different categories such as news, articles, e-retail, classifieds etc portals.
It is also advisable to maintain decent out going internal links in each of the pages and decent score would be max of 100 links in a page and there is no hard and fast rule about min or max links on a page. But webmasters must ensure they set a limit on no of internal links depending upon given situation after reviewing their Crawl Errors section in webmaster tools. As long as the pages are crawl-able, relevant and links are not spam you won't find any issues with limit on internal links.
Generally internal links helps the visitors to navigate from one page to another, add value to the pages in search rankings while spreading the link value for multiple pages from multiple links and defines or helps to understand the hierarchy of the website link profile.
Make your links crawlable and what you should avoid:
- Links blocked by robots.txt file or robots "nofollow" meta tag or rel="nofollow".
- Links that appear after performing a internal website search or form submission.
- Links in Frames and Flash plugins.
- Pages with tens and thousands of links.
How to build Search engine friendly External or Internal links?
Add high quality, meaningful and relevant content to compel other websites to make your website link from their website to gain inbound links with relevant anchor text.
- Give links to other pages/parts of your site from the relevant key terms in your content.
- Adding keywords in main navigation, side links and bread-crumbs.
- Create Navigation to most profitable pages using best possible key terms.
- Add keywords in the alt text while giving links from images.
- Use keywords to construct the url's which best defines the page.