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The official Google Response is: http://www.google.com/support/places/bin/answer.py?hl=en&answer=7091 Looking at the link profiles for a few of them they're certainly not the strongest, the only thing I can see that they have over the competition is the fact that 'Chicago' is in their domain name.

Were you able to find enough reasons to talk your colleague out of using it, or do you need some more backup?

Sounds like you're getting hit by panda. How robust is the content on the pages across your site? Directories are no longer a recommended method of link building. Without the URL it's hard to make a determination as to why you got hit.

Hi Ryan, thanks for the advice.

Thanks John, That  link was helpful, it is a similar concept but we are not using ajax.  I appreciate your response.

I didn't do an in-depth check of your site, but as long as you're still getting your Google organic traffic I think you're fine. It is hard to get into news, and the appearance of the site really shouts blog and not news site. If you haven't already, it's always a good idea to verify your site in Google Webmaster Tools. If you have some type of problem with your site, you'll often get a notice there. There's also lots of interesting tidbits of information you can find in that account that you can't see if you're not verified (more information about incoming links, for example).

Thank you much for that list!

What about posting a short mention and link to your new article on several user forums that are related to your niche? This form of article promotion can be quite productive. It is a form of link building. This method would be most effective if the links are to the article on your site. I would not advise publicizing an article on a 3rd party site for the purpose of building a link to your site, then linking to that article. You can take this approach and it does have benefits, but your efforts and the link juice are diluted.

There's also a problem that's happened in the last couple of days for third-party reporting of toolbar pagerank that might be affecting what you're seeing. Check out the post at http://mz.cm/rjPAwc.

In short, yes. Don't get me wrong.  It is perfectly fine to publish press releases on your website.  Google isn't going to lose trust in your website from selected content that might be syndicated elsewhere.  Give them a little credit.  Google certainly recognizes that press releases, however boring and uninspired, make up a necessary part of how companies communicate, and thus a necessary segment of content on the web.  Their algorithm, for all of its faults, is not completely without common sense.  Moreover, having selected content on your website that is duplicated elsewhere isn't necessarily a dealbreaker.  Google, particularly with Panda, seems to evaluate the trust of your website as a sitewide sort of factor, and a couple pieces of duplicate content aren't necessarily going to mess up your day. But if press releases do make up a significant portion of the content on your website, I would say you're definitely at risk.  Google will learn that your website isn't dishing out unique content, and they'll trust your website less because of it.  Moreover, press releases aren't exactly the world's best type content, even if they are completely original and don't exist elsewhere on the internet.  The fact is that there are much better opportunities to create original, engaging, and shareable content, and taking advantage of those opportunities will help your SEO efforts much more than any amount of press releases you could possibly publish.

There very well could be but I didn't look deep at all. I never even went past the first page of the site. I saw the footer and the phony review and quickly determined the SEO company was using poor techniques to manipulate results, and I would not want to expose a site to those methods.

Thanks EGOL. Good practial advice!  I'll take it into consideration. I guess I just reckon that this approach will cover the long tail to a marginal extent and I can ramp up my efforts  in a more hands on way for the main traffic searches.

position #1 to #3 on page one for every term I optimized for ....now on page 5 or worse. Been down for 6 months now done an extensive overhaul of content and onsite, title tags etc as well as off site and nothing has changed.

I think your analysis and recommendations are right on target- don't second guess yourself unless your client is willing to gamble. That said, there are creative ways to get high quality links through networking. The line in the sand between black and white is in constant flux and this is a great example of where this battle continues to rage on. If those inbound links that gave your competitor a boost were industry related, I might think that you've met your match and would need to work harder.  However, the unrelated industry links may not have caught them yet, but are you willing to take that risk?  Is your client? Much of the work in SEO is articulating the opportunities, cost, and risks of chasing the dragon.  If you move too quickly, you may get burned.  Arguing the slow and consistent approach isn't always the best route for a given situation, but arguing against the easy and sly SERP climb is.

There shouldn't be a problem since this is internal linking. Just watch out for having too many links per page.

You seem to have a clear understanding of the situation. You are making the conscious choice to continue with your current business practices. It makes sense. You have a monetary incentive to capture as much traffic as possible due to advertising revenue. As EGOL suggested, I believe the best paying advertisers will recognize your traffic as low quality and either choose not to advertise on your site or pay substantially less then they would for a similar ad on a better site. You also run the risk of losing many users. Humans don't like spam sites and will leave them for better sites. Additionally Panda changes will surely make it harder for your site to rank on it's legitimate content. Feel free to disregard this advice. I predict at some point in the not-to-distant future you will lose your advertisers or your traffic. The amount of effort you spend trying to get either back will ensure you never travel down this path again.