In March, Matt Cutts announced more changes were to come, with the intent of the changes to penalize over-optimized websites. This action hit both sides of the fence - sites that were over-optimized and hit the online companies that were providing these services. In fact, a major provider (BuildMyRank.com) closed their entire operation.
Next, in April of this year, Google made over 50 algorithm updates including launching the Penguin update, and several subsequent Penguin updates (refinements). And substantial, noticeable changes to search results did occur!
What Is Over Optimization?
At face value you could think that it concerns sites that have had strong SEO success (from black- or white-hat tactics) where Google had been unable to auto-budge through "existing algorithm factors", but it's far more precise and involved than it appears at a first glance. Specifically, the Panda and Penguin updates are combo-punches to neutralize two nasty areas of black-hat SEO. First, Panda went after sites, and site networks, where meaningful content are absent or woefully lacking, and one-way outbound links are bountiful. The intent of these sites is obviously to manipulate search results. Second, Penguin came in to clean up obviously sloppy, spammy black-hat SEO such as knocking down sites that have had an exceptionally rapid growth curve for inbound links, and/or unnatural consistency in anchor text for these links, keyword stuffing, and ties to the targeted link farms. If this is the case, the next question is "what is the percentage, rate or point that things are okay?". Don't worry about managing numbers so much as simply doing things that you know are proper.
How To Handle Penguin
Our opinion on how to handle Penguinis quite simple. First, if your clients' websites have been affected negatively you need to review and substantially alter your SEO practices. While current information claim that the Penguin update impacted over 3% of all search results, that Google issued over 700,000 messages through Webmaster Tools, and that some link-building operations have closed, we've seen no changes that warrant concern by anyone who has played by the rules. It appears that Google has simply caught up with the more complex black-hat tactics, and applied a remedy. Unfortunately this does mean that some innocent business owners are going to suffer from the work of black-hat SEO hacks.
Use Penguin To Harm Competitors?
Another question, to which Matt Cutts briefly commented, is whether or not a person or entity could intentionally apply "over optimization" to competitor websites to inflict negative consequences for their competitors. At this time our opinion is that sure anything can happen, but this is probably not worth a lot of concern.
What if my site was penalized by Penguin?
Take a minute to sigh because you have a big problem. It's not as simple as making a reconsideration request to Google. The basic solution, albeit somewhat impractical in many cases, is to amend anything that you know you should not have done in the first place. If you have an abundance of spammy links, you probably can't do much, if anything, about it. It's laughable to think that your shady link builder is going to take the time to undo their sketchy work - or that Google will care at this point. A good way to get back on track is to fully understand Google's Webmaster Tools and Quality Guidelines - and use them! In other words, learn to live within the law . . . and work to improve your website in a proper manner.
If your rankings have been decimated, such as your top rankings have fallen five or more pages, then you may have to ditch your "over-optimized domain name" and start over with a new domain name . . . and next time be careful about who you hire to work on your website. If your site (domain name) was dinged for "over optimization" then it's a bit silly to think that you can "SEO it" back to health.
Looking To The Future
If your website(s) have been hit by Panda or Penguin, you should take this as a wake-up call, and learn better ways to manage your online presence. Anyone doing SEO, novice or professional, could make a decision that now or later proves to be less than stellar . . . and Google may look past a simple matter. However, if you continue to deliberately, knowingly and willfully engage in black-hat practices your situation is going to end badly. If you're totally confused, you should contact a SEO company for professional advice and SEO services. From what we have seen, Panda and Penguin have generally been good for website users and ethical SEO practitioners.