There is no doubt that the perception in the industry is that negative SEO is a problem.
So much so, that in our last poll, only 11% thought negative SEO doesn't work. Now that we have "white hat" clients requesting negative SEO and and most SEOs feel it is easy to do, it is an issue. Heck, even Google has been saying it is possible since 2007.
But yet Google continues to down play it.
Bottom line, negative SEO is an issue. It is clear that it is an issue with the perception of negative SEO and I personally believe that negative SEO is an issue for Google's algorithms. Even if Google denies it, they need to at least fix the perception and that can be done through more transparency.
Recently I spotted a Black Hat World thread where these SEOs are talking about how they use fiverr to get lots of links to a competitor, so they get hit by negative SEO (either a manual action or Penguin action).
It is an issue and I strongly think Google needs to think hard about this and try to fix it.
Forum discussion at Black Hat World.
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