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All of a sudden this company is no longer ranking for their main keywords... Could multiple logs used for keywords and content harm a ranking or be considered cheating to google? or did they do something else to get punished?

First, take a look at the blog that you are looking to be a guest writer for. You should look for their style and of course, look at what they are writing about. Once you have done this, go ahead and create content that is relevant to what they write about; if it is a fashion blog, write about the latest trends and add images (again, look at what they have and copy the same style; you can give them something that copies their style and another option that is more your style). Email them and send them your work. If there is a number to call, I would call them first and then email them. Hope this helps!