You need to be a little more specific. Who told you the site was penalized for that reason and what exactly did they say?

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Who told you that the website was penalized for outbound links?

I agree with the above two commenters. Why are you so sure your website has been penalized and if so: how did you get the idea that it has been penalized because of too many outbound links? I have no idea why you decided to delete all the content on the website. If you know for sure that you have been penalized for too many outbound links I would suggest you just remove the links, not the content surrounding them. There are still some pages indexed in Google: use site:hxxp://www.valleyxpresso.com

Is this another case of the I'm not ranking so I must be penalized?

The URL is indexed. Where's the penalty?

I don't like the amount of control Google tries to have over our world. There must be a next big step !? What would the NSA do?
No Really, I agree with Bretlaw.

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Well, tell you what instead of asking this question i.e."Why my site is penalised"- Because you might be outside the Google Guidelines that's why they have penalised you. It would be better for you to login over to your webmaster tool. I am sure Google haver sent you a message why they have penalised your website.

I don't think there's a penalty. You are just not ranking well.

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I observe that many people were of the opinion that google does not penalize for Outbound Links. But the truth is they do penalize and it is MANUAL PENALTY. If there is an OBL in all the articles in your site or if you have participated in guest blog post sites like myblogguest or publish articles about all niches with OBL in your generic blog. However getting the penalty removed is very simple like adding an wordpress plugin which will nofollow all your outgoing links. I have removed such a penalty for one my clients in 7 days. It is really very easy unlike inbound links manual penalty.

well so far it seems that there are only 3 domains referring to you.
you didn't get penalized nor did get good results ether, unless you deleted a lot of links by now.

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Here some points to recognize your site why penalized by google,

Penalties can be automatic or manual. With manual penalties, you'll probably be told, but you may not always know you've been targeted if the cause is algorithmic. Those penalties may take even the most experienced SEO professionals by surprise.
For algorithmic penalties, here are some sure-fire clues.

• Your website is not ranking well for your brand name any more. That's a dead giveaway. Even if your site doesn't rank for much else, it should at least do well on that one keyword.
• Any page one positions you had are slipping back to page two or three without any action on your part.
• PageRank for your site has inexplicably dropped from a respectable two or three to a big fat zero (or a measly PR of one).
• The entire website has been removed from Google's cached search results overnight.
• Running a site search - site:yourdomain.com keyword - yields no results.
• Your listing - when you eventually find it in Google - is for a page on your site other than the home page.

It seems like you have some misconception about penalty and it's just a mistake and you may correct this mistake by putting it on the right place. And google is gentle in this case.

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