I have some thoughts that I want to air about the horse shoe method.
First I want to say that the properties are likely to rank well with this method. However I am not so sure about the money site.
You say that the linking structure will cause a PR snowball which will end up at the money site. I have some doubts based on my knowledge of PR theory:
1. PR transfer over an external link is subject to a damping factor of 0.85
2. PR is distributed evenly between all outgoing links.
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Based on these assumptions, the PR transfer in this network is inefficient. Let me explain.
All sites start with 100 points of linkjuice (just for convenience). I have studied the external link features of many properties and a good average is about 20 external/nofollow links which cannot be removed. Linkjuice evaporates when it hits a nofollow link.
So, squidoo starts with 100 and sends 100 x 0.85 / 20, or 4.25 points to Hubpages. Hubpages now has 104.25 points to send to the next site - but of course it can't as it's nofollow for most people. Let's assume we replace it with a ******** property.
This property sends 104.25 x 0.85 / 20, or 4.43 points of linkjuice to the next property.
The next property now has 104.43, same calculation etc.
When we get to wordpress or weebly, which are great for a tight PR flow, we see our PR being divided over only 2 other links. So by the time we get to weebly (which we will call the last property for simplicity) it's got something like 107 points of linkjuice, which transfers 107 x 0.85 / 2, or 45 points of linkjuice to the landing page. You can control the flow of juice from that point onwards.
So we've done all that work, made all those properties, but we've charged up the last site before the money site by less than 50%.
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Now, I don't doubt that this horse shoe system works, especially with the elegant linking system with no 3 way closed loops. I am going to try that myself in order to get some properties on page 1. I am just doubting the reasons why, and I feel that it's not very efficient for getting a money page ranked.
I think that google looks at links between relevant sites, sees they are in the text body etc and assigns the links a powerful ranking score. This is why linkwheels work. If the 2 laws of PR that I have stated are correct, this must be the case.
Therefore, new linking models should be based on relevancy power, and not the flow of PR, which tends to be very inefficient over most web 2.0 properties.