Googler Comments on Links at Google Groups

JohnMu added this comment to a Google Groups discussion about a site owner who thinks his t-shirt website has been penalized. It's looks like the site is indeed suffering from a penalty of some sort and does not rank well for 'Web Site' or 'WebSite' or 'WebSite Product', but does return a #1 result for 'WebSite.com'.

JohnMu's response is enlightening, especially reading though a bunch of rambling theories from various commentors.

It might be that the links to your site are not counting the way they
might have in the past. In general, it is important to us that links
are not just exchanged, bought/sold or otherwise used in an attempt to
manipulate rankings, as we have detailed in our help center article at
http://www.google.com/support/webmasters/bin/answer.py?answer=66356

If you find that your site has issues with regards to our Webmaster
Guidelines that can be resolved, I would recommend doing that and then
submitting a reconsideration request, detailing the changes that you
have made.

These guys seem to have a failry large % of links with similar link text, in sidebars, sitewides, and on blogs. It also seems that they have a large amount of paid posts with very targeted link text.

'not counting the way they might have in the past' is a general way of phrasing that I have seen Google use before as a response. I think most have taken this to mean that the links have been 'devalued' in some way and maybe the act of devaluing really is a penalty. This must be algoritmic in other words there is a threshhold that is passed.

But what acutally happens? Is it that these links really are devlaued for their anchor text and the other top phrase search terms for the destination site? Is it an 'upper limit' ceiling which is imposed on the site, it can't rank above a certain level no matter what they do for a certain period of time?

If it was basically a 'devaluing' of the specfic links, a site owner could get around that by simply working hard to build new links for their brand terms. However, JohnMu's suggestion to file a reconsideration request seems to imply that the whatever has been imposed on the site can be 'lifted'. In other words, they can't get out of the cellar until they clean up their act.