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My website is all about users posting links to external websites.

A quick script reveals that 700 of these external links are broken (for instance hffp://example.com or http://some-typo.com).

Independently of the fact that they are a pain for the user, does these broken links hurt my SEO ranking in any way?

Note: They are not internal links, just links to other websites. It is different from the problem of having your own website show 404 errors.

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Google's algorithm searches for many things that dampen user experience, it is believed that external 404's dampen user experience so its only natural that the pages effected would rank lower since no one wants to click a page and then find that links linking to other useful resources are dead, internet usage should be fluid.

So in other word's yes, it will have a effect on your rankings, how much sir? no one truly knows each individual factor so its impossible to say but you should address these issues.

As far as reading resources over the years I'm personally believe in that a page that contains a 404 externally will not be affected straight away for a 404, since there are many valid reasons why the 404 may exist and it may only be temporary.

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