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I don't really do professional SEO work, but I currently have a one time contract to help out on a web site at a company where a close friend works. The web site I was hired to try to get better placement for in search engines listings had a large number of inbound links, including at least one from a PR7 site, but wasn't showing any Pagerank in Google. (If I remember correctly, I think it was grayed out and not PR0.) Some of the other pages within the site had PR4s or less, but the home page did not have any Pagerank and did not come up in the Google search results for the name of the company.
The previous SEO firm had installed quote a large number of software generated garbage doorway pages all pointing to the home page of the "widget" site in question. This strategy seems to have worked for awhile, but of course as search engines caught on to this tactic it seems to have backfired.
I had them delete all of the garbage doorway pages and shortly after that the widget site showed up with a PR5. It seemed almost too good to be true that it would be this easy. However, the home widget page had not had any Pagerank for at least 4 months beforehand, and then almost immediately went to PR5, so we strongly suspect it must have been the garbage doorway pages that were causing the PR penalty, since we had not made any other changes to the page prior to having the penalty lifted.
The PR5 change came in between a monthly update. The home pages then started coming up as the first result in the Google rankings for the name of the company.
After a few small HTML tweaks and a Google update cycle later, the main widget site then went to PR6 with many of the next lower level pages improving from PR4 to PR5.
So at least in this particular case it was possible to recover from a penalty by removing spam code.
What was your clients re-action to your suggestion that the spam doorway pages be removed?
They were quite happy to do it. Their home page had no rankings to speak of on any major search engine despite being a fairly large widget chain (hundreds of stores), so they knew there was probably something wrong with their site. They really had nothing to lose by taking the pages out.
Plus I showed them how to download the Google toolbar so they could see that they had a penalty. They tell from looking at the toobar that their major competitors all had much higher Pageranks.