Google has trended towards devaluing links between domains with "Administrative Relationships." It's a good bet that they can figure out you own both domains.

That said, it's only a devaluation. The links still count - just not as much. Think of it more like internal anchor text from your own site. Like Nakul said, since it's only one domain, you're not going to suffer a "link-wheel" scheme penalty or anything similar. It's natural and normal for sister sites to link to one another - even groups of sister sites. But the links likely won't help as much as external links form outside sites.

Nick Kellet at List.ly reached out to let me know move about the service. He gave me permission to copy and paste his email below.

From Nick...

"I'd love to fill you in on the details of Listly and SEO

Sure we offer iframes, and embed, but they are really secondary options.Our first choice is to use our Wordpress plugin, which means a list embedded in a post is treated as part of the post. ie your content is SEO searchable.Wordpress is just a first stop in executing our full vision for Listly.Crowd contributions ensure your post is ever changing, we know that brings significant impact to search results.This changes the lifecycle value of a single post from an SEO perspective.I'd be happy to share more and give you some examples of what this means in terms of organic search.I'm you'll be impressed and curious.We also have some great local search examples too.The anchor text is controllable from Listly. List items on your lists are freely nameable."

I'm not that familiar with Listly, (Edit: See my other answer in this thread) but it looks like an interesting site. It appears they have several different types of embed codes so I can't comment on a particular style, but I can offer some general thoughts about embed codes and links.

1. It's generally helpful to have other sites link to you. That said, some of the embed codes appear to use either javascript or iframes, so the value passed from those links would be hard to determine.

2. On the other hand, Google typically frowns upon links built at scale from widgets or embed codes, especially if they contain optimized, keyword rich anchor text.

In general, I'd say these links are probably okay as long as you don't abuse the anchor text in anyway. I'm unsure if you can control the anchor text using listly, but this means using descriptive, non-comercial anchor text like:

• "Mark's profile"
• "markswebsite.com"
• "Our Listly lists"

If you're concerned about it, you can always point the links to a neutral 3rd party site, like your Google+ profile. But I'd be very, very careful about linking to yourself with widgets like these using any sort of anchor text you wanted to rank for.

Hope this helps! Best of luck with your SEO.

Hmmm... This is a hard one. (Oh man, did not mean to make the intentional sex referrence)

Yes, Google has made changes in it's algorithm in the past year that makes porn harder to search for on the Internet. These changes don't filter the porn per se - except when "Safe search" is set to on - but it does mean that you must be much more specific in your search queries to find what you are looking for. For example, the query "boobs" generally returns almost no porn in Google, but the query "boobs porn" will.

If I were building an algorythm to separate porn sites from non, a large amount of XXX in the incoming anchor text, or in the URL, would probably trigger it.

Oh the other hand, I'm inclined to agree with George - seems like there's something more going on here. The backlink profile isn't terrible.... but there's definitely a footprint of comment spam in there. I won't link directly, but some of the suspect, off-topic links I found include:

http://www.takarat.com/forums/showthread.php?tid=750&page=3
http://www.omyogapages.com/forum/showthread.php?t=43&page=7
http://www.atthepicketfence.com/2011/09/behind-blog-with-savvy-southern-style.html
http://www.marypoppins-homesweethome.com/2011/07/what-is-it-with-us-girls-and-ikea.html

These are pretty terrible   It's possible that there's 100's or 1000's more we're not seeing, and these are causing either a manual or algorithmic penalty.

My advice:

1. Check with Google Webmaster Tools for any messages - especially unnatural link warnings.

2. File a reconsideration request, even if you don't have any messages in GWT. Explain your concerns. Matt Cutts, the head of the Webspam team, helped write the original adult filter algorithms. He might take a special interest if you can get it to his attention.

   But mostly, what you're looking for is verification, or not, of a penalty.

3. You may need to clean up the links. Do your best to remove any suspect links. Use the disavow tool as a last resort.

Hope this helps! Best of luck with your SEO.