arohan - 6:43 am on Dec 29, 2012 (gmt 0)
Aristotle, the sites are in the same niche and the content is relevant. It is like a "widget" news site linking to a "widget" site. We might have a red widget news article linking to a green widget page but they are totally relevant. It is not a general news site but rather focused on the niche that I play in.
Disavowing is an option but it goes against my sense of fair play. It is a good site and they are not doing anything wrong and I am not going to send a negative signal against them by disavowing these links.
I have thought about this some more since posting this question here and reading the responses. At this point I think, if Google has a problem figuring this thing out, then it is their problem that they have to fix. Other search engines have no trouble at all.
Indyank, there are no sitewide or sidebar links. Also, I do have a good amount of domains linking. I did not claim to lack in linking domains.