The Google Sandbox is a term that refers to the waiting period that a new web site must go through before it will rank well in Google's search results. Basically, Google makes all new sites go through a waiting period to help verify the validity of the site.
Before the Google Sandbox existed, spammers could create a web site and use many blackhat tricks to get the site to rank well for certain keywords. The site would rank well and bring in a lot of traffic for a while before Google would blacklist the site for it's use of spam techniques. Then, it would all start over as the spammer would just move the site to a new domain name. Spammers could do this forever and attract a lot of traffic over time.
Within the last year, new web sites started to no longer show up in Google right away. This element of Google's ranking algorithm is known as the Google Sandbox. Once a new site is put online and Google finds it, Google will crawl the site and index the information, but it will not show that site in search results for a prolonged period of time. This time frame can be anywhere from 4-12 months. During that time, Google will continue to crawl the site checking for any spamming techniques. Google may even occasionally list the site in search results to see what kind of traffic it receives. But, this is only temporary and the site will go back into the Sandbox shortly thereafter.
The purpose of the Sandbox is to deter spammers from building sites and using spamming techniques to get the quick buck before Google bans the site. The waiting period gives Google time to check out the site and make sure it's a legitimate site before placing it in their search results.
Sites placed in the Google Sandbox may rank well for keyword terms with little to no competition. For example, a site built for ABC Electric Company might rank in the #1 spot right away for the term "ABC Electric Company" because there is little to no other competition for this keyword. Any keywords that many other sites may be competing for (like "Electric Company" for example) the site will not rank well for until is has been moved out of the Sandbox.
There is very little that one can do to get out of the Sandbox besides waiting it out. To make sure that a site gets out as quickly as possible, it's crucial to build a site that is optimized for search engines and a site that does not use any spamming techniques. Also, getting links from other sites to your site is seen by search engines as votes of confidence and will also help your site get out of the Google Sandbox quicker. At this time, other search engines such as Yahoo and MSN do not have this waiting period so checking your ranking status in these search engines can help to be a judge of things to come once you start ranking on Google.
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