UPDATED October 17, 2012. Read below.
Search engine optimization has a dark side, which takes two forms:
1) Companies who perform "black hat" SEO for their own benefit. Most commonly, this means creating lots of links pointing to their website to fool Google into believing that the destination site is important and should thus rank higher. (It works, but carries business risk.)
2) Companies who perform "black hat" SEO to push your site down in the rankings. In this case, a rival would create links to your site, but so egregiously fake that Google would notice and penalize the destination site. This is known as Negative SEO or Google Bowling.
Negative SEO is quite uncommon, but its lurid and malicious nature make it an interesting topic.
Two Simple Precautions
A few days ago, SEOMoz posted a "whiteboard video" about Negative SEO. I think very highly of the SEOMoz blog and service, but some topics don't benefit from the whiteboard treatment. This one in particular could use some editing, or stay in a text format... which is one reason why they thoughtfully provide a transcription.
Thus, my distillation of their 18-minute, 3,291-word opus:
- Don't let your website get compromised. Have strong passwords and mature security policies.
- Task someone to monitor newly created links coming into your site. There are free and paid tools to accomplish this. If you see comment spam linking into your site, you can go to Google and avoid a possible negative penalty.
The good news is that these precautions shouldn't represent any incremental effort. You should be doing the first for business continuity reasons, and the second as part of your online marketing effort.
UPDATE (October 17, 2012): Google solves the problem
Google released a tool yesterday called Disavow Links, which is part of their Webmaster Tools suite and should be operated carefully.
Their announcement is here. It is all very carefully worded and makes no hard promises, which should be expected regarding SEO.
In sum, you can now tell Google directly what links coming into your site are unwanted. After doing so, they won't count the (presumably) negative effect those links have on your site's ranking.
As the announcement says, "[the] vast majority of sites do not need to use this tool in any way." All the same, site owners should be pleased to gain a further measure of control over search engine rankings.