Just as you can recover from a Google algorithm update like Penguin, you can bounce back from a penalty as well. In fact, you can even partially bounce back, even if you're unable to bounce all the way back at once.
Link buyers, pay attention.
Member T-Harris says his site was hit with a penalty due to inorganic links, that he "removed a great deal of these links, amended anchor text when we had been participating in guest blog posts," and received a letter from Google's search quality team saying that after re-evaluating the site's backlinks, they were able to revoke a manual action.
"There are still inorganic links pointing to your site that we have taken action on," the message said, according to T-Harris. "Once you’ve been able to make further progress in getting these links removed, please reply to this email with the details of your clean-up effort."
Google Webmaster Trends analyst, John Mueller (pictured), jumped into the discussion to say:
That usually means that the team has been able to remove a part of the manual actions being taken due to the changes that you've made. It sounds like there still are some issues that you might want to review & resolve though. Generally speaking, it can take a bit of time for these kinds of changes to bubble up, and to be visible in search results, it would be rare to see a jump right afterwards. My recommendation (not knowing the specific case/site) would be to follow the advice of the search quality team and to continue working on removing any unnatural links that your site may have collected over time.
On that note, Google may soon let webmasters tell it specific links to ignore. Last week, Google said such a tool may become available in the next few months.