What are the criteria by which google can penalize any site???? I have many similar category site .Now i want to add few sites link on footer area. Will google penalize my site. All the sites are in same server.
http://www.mattcutts.com/blog/confirming-a-penalty/ have a look at this article this will help you alot !! Also you can check this: http://ankitrawat.com/blog/google-penalties/
Offcurse Matt's blog will help you to understand it more effectively. Here the major point is you need to be cautious about cross linking of your website with other of your websites. Yes, you might face the pennalization if you do it excessively.
I don't think Google will penalize your sites unless you intend to use them as a link farm. I have all kinds of similar websites on the same server, but all my links come from external sources, like bookmarking sites, article directories etc... So I wouldn't worry unless you link them together for link juice Now you can link them together and mark them as no follow so Google does not count those particular links in the index and the links are useful for the visitor only.
What u may be suffering through is, "excessive cross linking" (Google it for more info) There are several examples of Google penalizing such networks in ranking...but such an internal linking is not a crime provided not overrunning the moderate level.
These are the google penalizing criteria: 1) If you link to a website that is involved in blackhat tactics 2) If you are involved in blackhat tactics such as keyword stuffing 3) Embedding more than the links on the webpage 4) Participating in a link farm I think these are it.