Cloaking is a black hat SEO technique to represent website content to Google bots different from user browser. Cloaking is very harmful for website health, according to Google webmaster guideline. You should avoid the cloaking from your website. Clocking represents the website content according to IP address. This is very difficult to identify the website content. It is also possible to refresh website and get a different version of content on the same page. Basically Cloaking is used to increase the web traffic as well as diverting the users. Cloaking is a part of the doorway page technique.
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