Unfortunately companies started doing work to manipulate search engines by creating thousands of links to client websites to manipulate the results. So last year (March 2012) in retaliation, Google released 2 major updates to algorithms called Penguin and Panda to fight against these tactics.
The Aftermath
The results of these updates caused a huge impact worldwide causing many websites to fall off their ranking positions and causing outrage and grief for many. Even if you had followed best practices you may have found yourself in this situation because of the work some SEO company had done for you.
Read about how our site was hit by a Google update
The First Sign
Usually Google will tell you if you are being penalized by sending a message through Webmaster Tools that there were manual spam actions applied. This recently happened to an old client of ours who had discontinued working with us. After receiving the message I contacted the client and they informed me that they had hired an SEO company to increase their rankings. I informed them what happened in order to help them resolve the issue with their current provider.
The Process
To recover from a Google penalty requires in depth knowledge of how to audit a website and analyze backlinks. Most of the work revolves around removing spammy links coming to the website by contacting the owners and making a request. If this is unsuccessful you need to use the Google disavow tool to tell Google that you don't want those links to be counted against your website. Once you've done the work then you can make a reconsideration request and wait for Google to respond.
The Outcome
The good news is that if you do the work you can recover from the penalty. The process is long and laborious but well worth the investment.
If you've found yourself penalized by Google we can help! We have proven results from helping others in the same situation.