The penalty is simple. Panda penalized sites with poor quality content. Google has been fairly warning SEO firms that content is king and we agree. As written on our previous posts, original, relevant and timely content always beats black hat SEO tricks in the long run, nevertheless, so many people still try to land in the top ten spot with a site that has very little content of use to the searcher. This does not help anyone over the long term other than the SEO company that made a few bucks.
As noted by the Google webmasters:
"Almost the whole year of 2011 was a series of several updates related to content. Initially observed closely by SEO practitioners talking about the decrease of ranking of various sites and asking each other in forums if there was an observed algorithmic change and was dubbed as the Farmer Update which I believe the name probably came from Webmaster World where most group named algorithm updates come from. The changes were too evident already that when Google decided to talk about it already, they said they already have a name for the update and it was the Panda Update. And then this is were the series of updates came in."
Google's Matt Cutts, an anti SEO webspam policeman, noted that in the initial rollout, only around two percent of Search Engine Ranking Pages (SERP's) were affected. Apparently many of those affected have simply been scraping content from other pages. This happens a lot with Technoracle posts.
A second update went after content farms and pages with large amounts of advertisements compared to content. This is often done in conjunction with the scraping. A good example of this can be found here:
This site takes content from Technoracle, adds tons of ads and publishes. Such pages will never beat the original page in terms of rankings unless some additional content is interpreted as useful.
Panda has been criticized, largely by those who feel their sites were unfairly ranked lower. Since the original Panda release, an update has shown promise to fight perceptions of false positive rates (FPR's).
Barry Schwartz reported that some sites actually recovered after the 2.2. rollout.
Google’s Panda update runs for all languages worldwide except for Chinese, Japanese and Korean.
The big take away from all of this? Simple. Like in real estate (Location, Location, Location), in SEO land the mantra is Content, Content, Content. Focus on good, unique content and interested parties will come.