Google Penalties and How To Avoid Them - What are Some of Google's Penalties?
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Like any other disciplinary body, Google's terms of use enforcement department has a range of penalties. There are punishments ranging from the light for first offenders and relatively minor terms of use infractions. The penalties range upward to more severe punishments for repeat offenders of more serious terms violations.
Penalties vary in length. More minor penalties may last from one to three months, while the most severe banning from the Google index penalty may even be permanent.
A Google penalty may be minor, if any punishment can ever be considered as such. A loss of a point of Google PageRank (the measure of the importance of a web page on the Internet) is one of the less severe penalties. Of course, that too is relative.
Loss of PageRank
A loss of one PageRank point may not hurt as badly, if it moves a page (remember, PageRank is for a page and not a site) down from PR3 to PR2. It can really sting a website owner if the PageRank drop is from PR6 to PR5. It is much harder to move up from PR5 to PR6, than it is to recover from PR2 to PR3. That is because the Google PageRank scale is not linear, but exponential like the earthquake Richter Scale. It takes many times more and stronger incoming links to move up to the next PageRank level, with every succeeding step.
A more severe punishment would be the loss of all PageRank entirely. Regardless of what your website's current PageRank, to be moved down to a PR0 is a bitter pill to swallow. It is quite likely that Google PageRank will be harder to achieve in the future as well, although that is debatable. No one is certain if PageRank dampers continue for penalized sites into the future. As always, Google isn't talking.
As we move up the punishment scale, using PageRank drops as the punishment, the grayed out bar is the most severe. When Google grays out a site's PageRank, that site is marked off as a major problem. Linking to that site can even result in a penalty for the linking site. The gray bar site is a Google pariah.
Other Penalties
Other punishments involve the search engine results placements (SERPs). A penalized site may find themselves dropped either slightly, or perhaps even very dramatically, in the search results for their most important targeted keywords.
Since achieving top rankings for those keyword terms is the ultimate goal of terms of service violators, the resulting loss of revenue really hurts them. A loss of top positioning in Google costs the website owner money, as searchers seldom go beyond the first three pages of results; if they even go that deeply.
The ultimate penalty, of course, is complete banning of a website from the Google search engine index entirely. The length of a website ban may vary, but often if such extreme measures are taken by Google, the ban is permanent. In less stringent cases following correction of the violations, the ban may be lifted, and the site restored to the index. There is probably a probation period involved for re-indexed sites as well.
Google Optimization 
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