Linking to each other: when companies merge
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No it will not. Normally, Google wouldn't penalize if this is just a one time thing and you are not known for linking back and forth to one another or in any way associated with networks that do these type of links.
Also sites that are under one host or same IP will not give Google any reason to penalize you because many domains have the same IP (vast majority of sites are on shared hosting any way).
So you are safe to go and shouldn't worry about that. In the end it will just be AC Company < > new Plumbing Company Inc.
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If you go to amazon.com and look at the footer, you will find a huge list of links out to 23 other properties that are affiliated with amazon.com. These are all followed footer links.
If you go to these other properties such as diapers.com you will find many footer links out to a couple of other domains. Not all 23 domains but they are linking to multiple deep pages on one or two domains.
Last year Hayneedle stores got slapped out of the SERPs for a couple of weeks and my thought was that their huge interlinking network of stores was the problem. Hayneedle severely cut their interlinking and returned to the SERPs in competitive form. They still don't have the huge list of links to other properties on their site so I believe that the links caused them problems.
I would be afraid to do this type of linking on my sites but amazon.com does it and continues to be one of the most difficult to beat sites in the retail space. So, I am not recommending this... just pointing at somebody doing this at an extreme level and not seeming to suffer from it on the domain where the links are displayed or the domains where the links are received.
In my opinion, this is a linkjuice play, not something useful for their visitors because amazon sells all of the products on amazon.com
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Amazon can also get away with things that most sites would never get away with. Google is not about to take Amazon out of the rankings so they get a bit more leeway.
If this is indeed a linkjuice play, I would probably avoid it and just focus on what is going to deliver the best user experience.
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I would have zero hesitation to link these sites together. It is normal and natural for sites under the same ownership or that are partners with each other to link to each other.
I would however, be sure to link with the company name. Don't go for major anchor text like 'city name plumber'.
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Andrew is 100% correct, the big sites definitely get a pass. Google cannot penalize a site like amazon because users will go to a different search engine to find what they are searching for. Your sites on the other hand Google does not care about because no one will miss it if it's gone.
The best is to one way link from the weaker site to the stronger site - I would not interlink them both because it looks like reciprocal linking which is a dead SEO technique. Also you want to pass PR to your more powerful site and retain the PR on that site by not interlinking out to other sites. And as William pointed out, easy on the anchor texts or you may find penalized rankings for those terms.
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There is absolutely nothing wrong with reciprocal linking if it isn't being done to manipulate the rankings. If linking to a site is going to benefit your users (ie: show them you also own/operate a plumbing company) then go for it.
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Thank you William!
So you are thinking that having the websites on the same IP address lowers the chances, that Google is thinking that the links might be spam?
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The problem is.... Google can not determine "intent". And, they can smack you down without warning or appeal.
I am willing to bet nice money that Hayneedle's problem was interlinking.
I have a few links between my sites but for the most part they do not link to one another. And, it will be a cold day in Hades before I am putting up footer links like Amazon - even when my sites are tightly related and it might be good for visitors.
But, that is just my conservative philosophy. I might be losing out.
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Thank you for the amazon and Hayneedle sample. I know that I am not amazon and Hayneedle is a good warning.
My concern is less the linkjuice. I also might not use the link in a footer (especially after your examples). Probably the link would be placed in the header, in a blog post or in a slide. The aim would be to inform the customer about the additional service.
So they might think: "I liked this AC company. So their plumbing service should be good, too."
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True: Not using keywords in the anchor text should already help to prevent raising a red flag.
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No it has no relevance at all. Majority of the time people that want to link their sites together, they are under the same host. With the whole same host or IP and linking one another not coming up as a problem, it should be noted that it won't hurt you in any way.
But things could easily change or there might be variables we don't know. If you want to play it safe, just make the links one way and not reciprocal.