Rebuilding penalized site

Selected answers from the Dumb SEO Questions Facebook & G+ community.

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  Julius Park:  ;In 2013, we used the google disavow tool and got the unnatural linkbuilding removed from one of our sites that had been penalized. ; It still has good links and lots of citations throughout the web. ; But it did have that penalty before.  ; This is a site for a local business and it was referenced in many citations and had links built to it.
  
  Since then, we've started a new site for the location but never took the old site down. ;
  
  On one hand, I'm nervous about passing on the penalty (if one still exists). ; But on the other hand, I would like the links and perhaps there is a confusion on google's part since there are 2 websites linked to the same business. ; What would you recommend...
  
  Should I 301 the old domain, eliminate it, or just leave it as?
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  Edwin Jonk: Penguin will go through a 301. However keep in mind that you will never get a full recovery. Namely the (unnatural) links that gave you a (little) boost are gone. How much recovery you should expect, I do not know.
  
  +Richard Hearne ;any thoughts?
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  Julius Park: +Edwin Jonk - Thank you for the response. ; I'm not looking to recover the old site to its old ranking. ; I would like to improve the rankings of the new site but am not sure what the best way to do that is (in terms of what to do with the old site)
   ;
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  Edwin Jonk: +Julius Park ;I understand. My thinking is: If there is a manual penalty you need to fix that first before 301 redirecting.
  
  With regard to penguin (algo update) the bad links will pass through a 301. Since you did disavow links and you do not mention a recovery, I am not sure.
  
  That is why I pinged +Richard Hearne ;because he knows more.
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  Julius Park: +Edwin Jonk Sorry for leaving out that crucial detail. ; After the reconsideration request & disavow was done, the manual penalty was removed. ;
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  Edwin Jonk: +Julius Park ;thanks. Do you think the old site still has a hit from penguin?
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  Julius Park: +Edwin Jonk I honestly can not separate the effects of penguin vs. other factors that occurred at that time such as the old site being redesigned, lack of on page seo at that time, etc. ; I also don't know exactly when the manual penalty was applied - only that it was.
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  Richard Hearne: Couple of this to define before giving any opinion:
  
  1. Did the site have a penalty listed when you view Search Traffic > Manual Actions in Google Webmaster Tools?  ;It's not clear what this penalty was from your post, and this could be key to any advice you could follow.
  2. If the answer to (1) is no, then do you know with confidence the exact date the penalty was applied?  ;This will help identify what type of penalty you had/have.
  
  Now, assuming you had a Penguin penalty here are some thoughts.
  
  It was generally accepted that the penalty could follow you through a domain move.  ;However, Googlers also stated that their algos were clever enough to know when this was a site move rather than just a domain move.  ;A site move could include a new site.
  
  [Hang on - just read all the comments]
  
  I think if you had a manual penalty, and it was subsequently lifted, you're fairly safe to redirect. From a Penguin perspective, and I'm somewhat guessing here, I don't think you need to worry any more about penalty passing across 301.  ;I honestly now think Penguin is dead in the form we knew it.
  
  I would however suggest you try to clean out any problematic links using disavow tool, and try to fix up any other site issues you refer to above.
  
  Of course, as with any free advice - your mileage may vary.
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  Julius Park: +Richard Hearne - Thank you for the response. ; There is no penalty currently listed on google WMT but there was. ; I do not know exactly when the penalty was was applied because WMT wasn't installed. ; The message I received after the reconsideration request was "Reconsideration request for xxxx: Manual spam action revoked."