Competitors backlink strategy

I'm trying to understand my competitor's backlink strategy. It appears they have directory listings under the "source page title and url" in SEMRUSH and under the "anchor target and URL" the links all go to an abbreviated domain name with the word localhost

example domain THIS IS NOT REAL www.johnsjunkyard.com

www.johnsjunkyrdlocalhost.com

But the pages are all errors

ERROR​

The requested URL could not be retrieved​

some will also have localhost/ with a location of a city or state

Can anyone identify what kind of technique this is?

Classic case of using PBNs or a similar grey hat tactic. They’re likely using ‘localhost’ in their URLs for testing or to throw off anyone snooping around. If those links are indexed and passing juice, they could be manipulating SERPs, but if they're all errors, it’s possible they got penalized or they're in the middle of setting up a more complex scheme.

maxmayer said:

Classic case of using PBNs or a similar grey hat tactic. They’re likely using ‘localhost’ in their URLs for testing or to throw off anyone snooping around. If those links are indexed and passing juice, they could be manipulating SERPs, but if they're all errors, it’s possible they got penalized or they're in the middle of setting up a more complex scheme.

Click to expand...

So the PBN or directory site is live and can I see how the business is promoted on it

But the link that is suppose to go to their webpage is the localhost. Are they doing something to mask the orginal URL so I cant see what page on their website they are linking to?

Im just trying to understand process in hopes I can learn and repeat it