You'd think that with a name like 'Panda' the Google Panda update would be warm and cuddly. But anyone who has experience of pandas knows just how dangerous pandas are be if they turn on you. In the most part, genuine sites have benefited from the Panda update (aka Farmer Update) because it reduces the number of spam-like sites and content scrapers, of which there has been an increasing number in the last year.

Scraper sites have automated programs which copy the content from geniune websites and post it on their own websites. Some do this with the consent of the source website, such as rss aggregator type sites, but others do it without permission and there is not much you can do about it if the scraper site is based in a different country (many of them originate in China). If the scraper site content gets to be indexed first, then this has a massively negative impact on the site that originally published the content, as google may classify the source site as using duplicated content and therefore downgrade the site in the SERPS. This is a form of negative SEO which is difficult to counter.

The Panda update contains checks and balences to reduce the likelihood that your site will be downgraded, but there are some sites that have been panda-swiped by mistake.

What do you do if your site is downgraded by the Panda?

SEOptimise  gives some really good advice on how to counter the Panda update. Essentially it advises that you look at the quality of backlinks, stop spammy link building (using natural link building instead) and check that your content is unique. Another suggestion is to remove 20-25% of lowest performing content. I'm not so sure about this last one personally. I find that the majority of my traffic comes from long tail keywords, and removing the lowest performing pages will have a negative impact on search engine referrals. Also, if 20% of your content is not required, why would you have it on your website in the first place? It would be interesting if someone conducted an empirical investigation into whether this would indeed help.