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google SEO: Real black hat secrets unleashed and how to avoid it - American Chronicle

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If the DNS server points to 2 or more of your websites which are hosted on the same IP address, it is called reverse IP cloaking. It is a black hat technique.

I may be getting this confused, but is this not what add-on domains are? So its a bad idea to have more than one website under the same hosting account?

Why would anyone host a multiple number of websites on the same IP address?

umm... to save money
 
"If the DNS server points to 2 or more of your websites which are hosted on the same IP address, it is called reverse IP cloaking. It is a black hat technique. Why would anyone host a multiple number of websites on the same IP address?
Because, to gain more back links for all those websites. As, most of the web pages of those the websites in this case are interlinked to each other to get more number of incoming links. So, this is considered to be a negative factor in terms of SEO."

The rest of the article is sound - this part is just convoluted and wrong. You can have multiple websites on the same ip and not have them linked to one another. You can also have multiple websites on the same ip and have them extensively linked to one another and suffer no penalty. You can also have ten of thousands of websites on ten thousand different servers and have them all interlinked - what's the difference?!

And as HomerJ mentioned - millions of websites fall into this category of being on the same ip - it's called shared hosting and/or with add-on/extra domains! Every search engine knows this - but clearly the writer seems to misunderstand the obvious.
 
http://www.hostgator.com/news.shtml

Host Gator recently introduced the SEO Hosting division, which gives customers multiple C class hosting capabilities at affordable prices. The new division has its own site and resources and SEO Tools.

The new service stemmed from customers regularly asking Host Gator for multiple C Class capabilities because of their belief that search engines will penalize sites that have the same C class and are linking to each other...
 
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