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Linking and Google Question

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What does Google do to websites which are linked and on the same server or even ip addess? Do they simply ignore the link, penalize the incoming and/or outgoing link site, something else?
 
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If links are coming from different sites with the same IP, then these are considered as backlinks. These are as valuable as backlinks coming from different IPs.

But if google detects that a person is doing huge internal linking in his own sites, then that can hurt a site. If you own 2 sites with same IP, then you may link between them if it is beneficial for the users.

If someone who owns another site with the same IP, then linking to your site is considered OK.
 
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