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SEOblog offers some steps you can take to recover from a Negative SEO attack.

How to Detect If Your Website Is a Victim of Negative SEO

Often times, when your site dramatically decreases in search ranking overnight, it?s because you?ve been hit with a Google penalty for something you?ve done. It might be the ad-to-content ratio. It might be purchased links or social signals. It might be keyword spam. Whatever the case, it?s something you know about and can fix. Sometimes, however, you may be the victim of a negative SEO attack. What is it, how can you tell if you?re under attack and what can you do to stop it?
 
Didn't Cutts cover this in a video some time ago? I don't have the time now to look for it but I thought he spoke to the fact that a competitor couldn't hurt your site if they linked from bad neighborhoods to your site. The only way to you could be hurt is by linking out to bad neighborhoods.

I guess this article doesn't specifically talk about linking from a bad neighborhood but basically adding enough links to your site that would trip a Penguin filter? Has anyone or their clients been a victim of this? Care to share your story and how it worked out in the end?
 
My thoughts about backlinks and negative SEO...

If a business is doing the right thing - promoting themselves, getting known "out there" and getting links naturally and over a period of time, building their own authority through regular blogging, quality content that gets shared and engages people, and so on... negative SEO doesn't work against you.

If however (and this is most often the case) business owners build the site and then forget about it, negative SEO works. Sad but true.

I know two sites who were hit hard by negative SEO attacks. The first was as in the first scenario. The second, was, well you guessed it.

Cleaning up a negative SEO attack is often more expensive (and certainly more painful all round) than if the business did the right thing in the first place.

While we all know prevention is better than cure, too often as human beings, we have to learn things the hard way.
 
I had a project where we were in the first 3 months of optimization, slowly (naturally) building links, great content, youtube videos, etc... The client was moving from page 2, to page 1 in a fairly niche, but competitive industry (competing against big tech stores like BestBuy, and Future Shop, etc on the web).

Suddently 4 months in a competitor launched a negative SEO attack and subscribed my client to a paid linking scheme service that was $100 for 500 links.... I know it wasn't my client, because he barely knew how to use his email and would never use his credit card online (it was hard enough to get him to pay via credit card for the SEO!).

It worked... the site was not ranking and all the good work we had done seemed to be lost :( Thank god for adwords, we kept the client in business while we disavowed all the links and figured out where they came from. The site where the links were finally traced back to actually told us that we couldn't know who signed the client up because customers information was "confidential"... Grrrr!!!

Anyways, disavowing took about 3 months to kick in and all was well again. After a year the paid links were removed (not renewed).

That was 2 years ago! I'm not sure if Google's done anything else to stop negative SEO from hitting search results... I'm sure by now she can tell where negative SEO attacks come from and just choose to ignore those links instead of penalizing them.
 
I agree Kate, that Google mostly ignores those links instead of penalising the sites. For the most part those manual penalties seem to be "expiring" (no first hand knowledge of that, just hear-say) and I'm not hearing of new ones cropping up.

Good point too, about young and fresh sites being hit with negative SEO - they haven't had the chance to build up a good track record.
 

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