Web masters are still debating over the question over optimization penalty exists or not. What exactly is over optimization penalty? When you are optimizing your website and when you over do things your website may not just comply with the search engine requirements but it may exceed the requirements as in the case of keyword stuffing. When this happens with most of the ranking parameters, your website can incur over optimization penalty.
Even though you may not have used any spammy methods or black hat tactics you can still be over doing things. Web pages with a very high density of keywords may set the flag off. It might be considered to be doorway pages that are created specifically to attract the search engines. This is one of the main factors that often pull your website down in the search results. You may not be totally banned but the effects can be bad enough to cause serious damage to your website’s rankings.
Another area that is suspected to cause over optimization penalty is modified text. This is nothing but the formatting of the text so as to increase its weight. Keywords will often be used in headings with H1 tags, bolded, underlined. However, there is no clear consensus on this factor whether this could really elicit a penalty. However, it may require that we modify the text extensively for presentation purposes without any intention of SEO. Google and other search engines cannot possibly use this as a factor for penalty.
Yet another potential area for penalty would be external links that are pointing your site having the same set of keywords. If a large number of links are pointing to your website with the same set of anchor text then there is a good reason for the search engines to suspect that your website is not linked to in a natural way but it has been done specifically to enhance the site’s performance online. So when you are building links to your website make sure that you use different set of linking text for each link.
There are evidences that Google penalizes over optimized websites though it may not be accepted by all, there is a certain amount of grey area. If it is not penalization how do we explain sudden fall of a website in the search results. Nonetheless, there is no compelling evidence that Yahoo and MSN have over optimization penalty for websites. Since Google is the major traffic provider for websites, it may cause enough damage for websites that are over optimized. All that we are discussing with regard to over optimization penalty are only inferred we do not have any clear-cut statements from any of the search engines on this issue. However, the inferences that we make seem to be well supported by the performance of the websites online. Therefore, when you are optimizing you websites take a balanced approach and never over do anything that will set the red flags off.