A discussion on the mailing list of the NANOG (North American Network Operators Group) in 2002 felt that Google might be penalizing page rank for running your website in a shared hosting environment where more than one website exists on the same IP address.
While there are drawbacks to this type of shared environment, like IPs being black listed by anti-spam email organizations, slow site response due to high traffic bottlenecks, and poor server configuration, there is no specific penalties to SEO ranking that can be found.
In fact, in an article by Slashdot in 2002, Director of Technology at Google, Craig Silverstein, answered a question about dedicated IPs and their affect on SEO.
Craig: Actually, Google handles virtually hosted domains and their links just the same as domains on unique IP addresses. If your ISP does virtual hosting correctly, you’ll never see a difference between the two cases. We do see a small percentage of ISPs every month that misconfigure their virtual hosting, which might account for this persistent misperception–thanks for giving me the chance to dispel a myth!
This statement still appears to be true today as Google SEO and software engineer, Matt Cutts has explained in his article on Myth Busting: Virtual Hosts vs. Dedicated IP addresses which states that:
I’m happy to affirm that this statement which was true in 2003 is still true now. Links to virtually hosted domains are treated the same as links to domains on dedicated IP addresses.
While there are benefits to having your own dedicated IP address for each website you are running, IPv4 addresses in the world are running out, and Google sees that running on a shared environment is a necessity of our infrastructure.
On March 3rd, 2008, the Search Engine Journal additionally addressed an issue where Google could penalize sites in a “bad linking neighbourhood”. Websites that practice spamming, or “link farms” of massive interlinking might see dilution in page rank for those domains.
Of course if you have 1,000 sites running on the same IP address which all link to each other and to bad linking neighborhoods, the PageRank between those links which are being passed along should be diluted and if some of those sites are practicing questionable methods of, well, spamming Google … having them all grouped together should set off some kind of red flags.
Have you any specific information that shows penalties to SEO ranking or normal operation of your domain for being on a virtual hosting or shared environment?