I'm using the link:www.domain.com function in the google search and am a bit confused.

When I type in my domain as normal, I can find sites that link to it. When I use the link: function though, it doesn't list any. I compared it with other sites to make sure I'm searching correctly as well.

Does it take longer for it show up as a link?

Google's link: command has been buggy for quite a while now.

They don't want people searching their backlinks or competitors backlinks on Google.

I suggest using Yahoo and use the same format, make sure you include http:// -- link:http://www.yourdomain.com/

I believe searching for your domain only shows sites with your domain on it but may not actually be linking back. Using link: looks for actual incoming links.