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A thread at WebmasterWorld discusses someone's theory that he has been penalized by Google because of conducting a heavy amount of cross linking between sites. I posted about a week ago on this topic and named it Pyramid Linking Strategies, which discusses how to avoid such a penalty.
But what do you do if you are already penalized? Some people place the noindex, nofollow tag in the robot.txt file. Then they revamp their sites and remove this tag. Build up new links in a triangular fashion and work hard on getting new links.
