How do we know? There's a few common signals:
The domain is relatively new (usually less than 1 year old, but sometimes as old as 2)
Pages on the site are unable to rank for even exact title tag matches
Other sites/pages outrank it for search queries with clear navigational intent
A temporal cycle in which the site initially ranks quite competitively for relevant queries, then suddenly drops off 30-500+ ranking positions
Other Google SEO metrics appear that are typically positive signals (such as assigned PageRank via the toolbar & sitelinks for domain searches)
The site ranks competitively in Yahoo! & MSN/Live
There's no indication of spam or manipulative tactics that could cause the rankings issues
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