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Navigation and links are the features that make the web such a pervasive medium. Almost any web site will employ the use of navigational links - either within the same web document, within the same web site, or to another web site.
It is important to all users that links be clearly marked and distinguishable from the rest of the items on the page.
Underlining links (by default or on hover) within the body of the text ensures that all visual users can distinguish linked text from normal text. The use of colour alone may not enable someone with various colour-vision deficiencies to find links.
Do not underline text for emphasis when that text is not hyperlinked. To web users, underlined text signifies a link. When required, use bolding or italics to emphasize text.
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Placing navigational links in an unordered list provides structure to the document and "groups" the links together, establishing a relationship between the items.
Links that are used for main navigation do not require underlining, though they must be distinguishable by other means; for example, colour, border styles (i.e., placing a "box" around related links in a sidebar, or other area) and placement on the page.