A while back Google officially posted on Twitter about sites that lease out its own subdomains.
Google said “We’ve been asked if third-parties can host content in subdomains or subfolders of another’s domain. It’s not against our guidelines. But as the practice has grown, our systems are being improved to better know when such content is independent of the main site & treat accordingly. Overall, we’d recommend against letting others use subdomains or subfolders with content presented as if it is part of the main site, without close supervision or the involvement of the primary site. Our guidance is if you want the best success with Search, provide value-added content from your own efforts that reflect your own brand.”
Well, now it seems Google is taking action by penalizing those sections of sites that have these lease out sections.
Evidence in the SEO community circulating which suggests that Google has taken actions in cracking down on domain leasing. They see a massive drop in rankings for websites which are hosted on leased domains. It is also being said that EU and US sites are mostly affected at the moment.
Glenn Gabe posted examples of sites getting hit on his Twitter stream: