Google Blogoscoped has an interesting article about using hotlinked images to gain high organic rankings.
Michel Telendro told Phillip Lenssen, "“I do one of this hotlinking with one flickr image in a new domain (3 weeks, no backlinks) and in one week I was ranking #3 for that keyword in [Google Images].”
Case in point – do an image search for paris in Spanish Google, and of the top 5 results, all but 1 are hotlinking the image. Even when you do a Google web search, thanks to the direct image results box on top of the web results, a hot linker ranks top for paris."
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