I guess I should define cheating, because technically any SEO specialist that tries to improve rankings by link building is cheating.  But as I said before, there is morally acceptable cheating and then there is blatantly evil cheating.

Several weeks ago I watched one of my clients competitors skyrocket up the rankings.  Upon reviewing the inbound links, I found that there were links from unrelated blog posts of dubious quality; in fact many of the posts were incomprehensible and the content was not remotely related.   Clearly these were not links from authoritative sites with related content.   I call this blatantly evil cheating.   But creating 100s of text links seemed to work for a short while.  Now I It turns out that the competitor’s website is starting to fall in rankings as maybe Google’s algorithm that evaluates the source of the inbound link takes a while to kick in.  Hopefully justice will prevail.

This same client has another competitor that routinely cheats and rises to the top, then after several months’ falls, only to adopt another dubious technique and rises up like a phoenix out of the ashes.  

In both of these cases, Google eventually discounted the links that created their momentary glory, but Google did NOT punish them.   This is important because it reduces the risk of performing these dubious techniques.  Discounting means to ignore the links in question and let your site stand on the other links.  Punishing means that Google will incorporate some action that lowers ranking regardless of what other legitimate linking you have. 

Matt Cutts recent statement about Google addressing overly optimized sites and giving non-SEO’d sites a better chance of rankings (see blog post) implies punishment more than discounting, although I have to admit that this may not have been specifically stated.  Punishment has some real implications in the SEO world.  The risk of dubious link building increases significantly.  This hopefully will cut down on that practice significantly.

By the way, Google has punished sites for blatant black hat SEO, so it is not like this never happens, but at least with sites that I investigate, it is not common for Google to do this.

 On the other hand, does it open up some darker issues such as trying to hurt your competitor by doing these known dubious techniques?  I am sure Google has all kinds of sophisticated algorithms to check for this but just as the most sophisticated security system can be hacked, I believe that someone will figure a way to use the algorithm changes to harm a competitor.   One mechanism to address this potential issue is through Google Webmaster tools.  Currently Google is sending messages to site owners when it has detected “unnatural” patterns.   This may give the site owner a chance to mitigate the issue or even claim that there site was “attacked”.

All this is wild speculation of course, the algorithm change has not taken place yet so it is not really known what will happen.  I am sure this will keep a lot of the SEO research firms and specialists busy for several months figuring this thing out.