In a post today on the Google Webmaster Central blog, Greg Grothaus and Shashi Thakur of the Search Quality Team wrote a post titled Server location, cross-linking, and Web 2.0 technology thoughts. For the most part, the information covers some basic info, such as how server location affects Google's perception of the site (i.e. if you have a .co.uk domain, or an IP address based in Enlgand, you are more likely to be thought as a site suitable for an English sudience).
However, it was interesting to read the comments on cross linking between sites. Shashi commented on this, and took a traditionalist Google view that you need to evaluate this from the point of view of the quality of the user experience. Here is what he had to say:
Before you begin cross-linking sites, consider the user's perspective and whether the crosslinks provide value. If the sites are related in business -- e.g., an auto manual site linking to an auto parts retail site, then it could make sense -- the links are organic and useful. Cross-linking between dozens or hundreds of sites, however, probably doesn't provide value, and I would not recommend it.
The implication is clear, that linking between unrelated sites, even if you own them both, is not something that Google would recommend. Would this lower your rankings? Shashi did not comment on that issue, and nor would I expect him to. Practically speaking, I think it would be hard for Google to place a negative weight on such a factor.
However, I would still pay heed to this advice. Creating a quality user experience can only help you in the long run. It's also really useful to understand the inner motivations and thoughts that drive the Google engineering mind. A quality end user experience is king. Whether or not Google has figured out how to measure that today, directly of indirectly, is not the only issue webmasters should be thinking about. Understanding where they want to go with valuing web sites in the long term is at least as important.