Monday we reported that the link reports in Google Webmaster Tools appeared to inflated.

Many users started noticing huge increases (few noticed declines) in the number of links being displayed in the link report in Google Webmaster Tools. Most thought the spikes were unbelievable and had to be a bug. Some suspected it might have to do with the new Caffeine index launch.

Well, Google finally replied telling us it is Caffeine related. JohnMu of Google said in a Google Webmaster Help thread:

So it seems like you can now expect a heck of a lot more data to be shown in the link reports and likely the other reports as well.

Good stuff!

Forum discussion at Google Webmaster Help.