I'm having a blog that has been seeing steadily rising traffic for the past year. Mostly from SEs especially Google, and long tail keywords. Very steady traffic. Then, couple of weeks ago, traffic plunged 50% and never came back up. Now it's a steady 50 % of what it used to be. Very abrupt. My guess is that I got penalized somewhere, but I can't figure it out. My main keywords are mostly in the same SERP positions. My PageRank is still the same. So it is likely I got removed from many long tail searches. The only thing that MAY be the reason is because I allow Do Follow on my blog. It has not been that great a thing, because I only ended up with tons of spammy comments related to totally unrelated things. Most of my visitors are from SERPs, so they don't really comment anyway. The ones that do comment, find my blog from some blog comment software. I suppose, if you want visitors to comment, then you need to work the social Web 2.0 crowd. I mean real comments. So, is allowing Do Follow bad for your blog?
You can only get penalized if Google finds out that you are selling links. In Matt Cutt's blog, the comments are doffollow, so if you will get penalized, then so will be every other blog with do follow comments