Recently I have been reading and hearing a lot of webmasters complain about a huge drop in their Google traffic. There are just too many threads to reference, so I thought I reference one valuable post by JohnMu of Google.
John said in response to why a site lost virtually all of their traffic, in a Google Groups thread:
Looking at your site, it might be that one issue could be that links pointing to parts of your site are not valued in the same way that they used to be.
This is a guy who has exhausted looking at coding issues, all on-page SEO issues, crawling issues, indexing issues and so on. Google then came in to tell him, you know all those links you have - well, they may be the cause for your site not being ranked well in the Google search engine.
The question you get from such a response from Google is two fold:
(1) Is this a link penalty? If the webmaster can somehow drop those links, will you see an immediate recovery in rank?
(2) Are the links just devalued? If so, then if the links don't count, should the webmaster just focus on getting better quality links and not worry about those "bad" links?
Forum discussion at Google Groups.