According to many SEOs who use private blog networks (PBNs), Google has handed out a massive number of manual action penalties for these sites. The standard reason for the penalty looks to be “thin content with little or no added value.”
If you don’t know what a PBN is, then you probably don’t have to worry about being penalized. But for those of you that don’t know, PBNs are groups of sites usually owned by one entity which create a link network within themselves to build authority on a subject. Since the authority is supposed to eventually benefit one entity or a group of entities, the blogs are generally closed off to other contributors and are not really meant for users in the first place.
Why the penalty?
To know this, you have to be familiar with Google’s quality guidelines. (TL,DR: don’t try to manipulate the algorithm and always focus on quality and value to users.)
Because PBNs are trying to manipulate Google’s algorithm by building up content and link networks through a bunch of sites owned by one person, they are violating the quality guidelines.
Besides the manipulation, they’re also violating the second half of that summary: quality and value. The PBN sites are not really meant for users; they’re meant for a search engine to read and (hopefully) see as authoritative. So as far as quality goes, Google doesn’t want to associate with these sites because if they were to appear in search results, they would offer little to no value to a user if clicked. That means Google isn’t giving the user what he or she wants. That makes Google look ridiculous. And a search engine in Google’s position can’t afford to be made to look ridiculous.
Manual today, automatic tomorrow
Google is getting much, much better at recognizing deliberate manipulation and low-quality domains automatically (like a human would!), but it’s not there yet. Sometimes it takes a human to step in and make sure everyone is playing by the quality rules.
The good news is that quality is in your best interest, too! A site that offers a lot of value to users, has natural links back to it, loads quickly, and contains lots of fresh, original, and useful content is going to be better, both in the unfeeling, mechanical eyes of Google, and in the picky, fleeting eyes of your everyday internet user.