If you use unethical SEO techniques like black hat to improve your website ranking and traffic, Google easily identifies it and penalizes your site which is termed as Google Penalty. Website position (ranking) will drop down if site is penalized.
If your website traffic decreases drastically, don't assume that your site has been penalized. There may be several technical problems going on with your site. To check whether your site is penalized or not, just type site:yourdomain.com and link:yourdomain.com. If it doesn't display Url and Backlinks of your site in search results, if you find only a home page in search results then there may be a probability of Google Penalty.
To avoid Google Penalty, you must follow below guidelines:
1.Don't use hidden links and duplicate content (Plagiarism).
2.Avoid cloaking or sneaky redirects.
3.Remove doorway pages created for search engines not for users.
4.Avoid Keyword Dumping and don't link to bad or banned sites.
Check your webmaster tool account for warnings to know about unnatural links and doorway pages that exist in your site. If your site has affected with Google penalty then first thing you have to do is to identify the cause of Google penalty because if you violate any Google guidelines your site may lead to penalization.
After removing unnatural links and offensive content, submit reconsideration request to Google by visiting site http://www.google.com/support/bin/request.py. This is a manual process and it takes some time to verify your website by considering Google webmaster guidelines. If you set robots.txt file to avoid all bots or your server contains any configuration problem leads to blocking of your site in search engines.
Algorithm and manual are the two types of penalties you can receive. Algorithm penalty occurs when you violate Google terms of services. When you use irrelevant keywords, duplicate content and black hat techniques then manual penalty takes place. Website is completely thrown out of index, if it is affected with manual penalty.
Minus Thirty Penalty (-30 penalty): Thirty penalty affects your entire domain and it seems to be a manual penalty which drops your site in SERP. This penalty is incurred when your site contains thin original content and unnatural links. You can avoid -30 penalty by varying your anchor text and updating site with unique content.
Minus 950 Penalty (-950 Penalty): 950 Penalty affects few pages and your site suddenly goes down to bottom of search results. You can easily notice 950 penalty, by checking the keyword position of your site in SERP. So, use effective keywords and avoid keyword stuffing to get out of 950 penalty.
Extensive two way link exchange leads to Google penalty. Buying and selling links comes under link spamming, Google detects all these techniques easily and either it penalizes or bans your website.
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