Unfortunately, Google doesn't really want us to know exactly what their algorithms (updates) are doing. Google's blog had this to say upon the release of the Panda update:
"This update is designed to reduce rankings for low-quality sites—sites which low-value for users, copy content from other websites or sites that are just not very useful. At the same time, it will provide better rankings for high-quality sites—sites with original content and information such as research, in-depth reports, thoughtful analysis and so on."
Basically, Panda updates are designed to target pages that arent necessarily spam but arent great quality, either. This was the first-ever penalty that went after “thin content,†and the sites that were hit hardest by the first Panda update were content farms (which why it was originally called the Farmer update), where users would publish dozens of low-quality, keyword-stuffed articles that offered little to no real value for the reader. Many publishers would submit the same article to a bunch of these content farms just to get extra links.
Panda is a site-wide penalty, which means that if “enough†(no specific number) pages of your site were flagged for having thin content, your entire site could be penalized. Panda was also intended to stop scrapers (sites that would republish other company’s content) from outranking the original author’s content
The Google Penguin Update launched on April 24. According to the Google blog, Penguin is an “important algorithm change targeted at webspam. The change will decrease rankings for sites that we believe are violating Google’s existing quality guidelines.†Google mentions that typical black hat SEO tactics like keyword stuffing (long considered webspam) would get a site in trouble, but less obvious tactics (link incorporating irrelevant outgoing links into a page of content) would also cause Penguin to flag your site. According to Google,
"Sites affected by this change might not be easily recognizable as spamming without deep analysis or expertise, but the common thread is that these sites are doing much more than white hat SEO; we believe they are engaging in webspam tactics to manipulate search engine rankings."
Unfortunately, Google has yet to outline exactly what signals Penguin is picking up on, so many site owners that were negatively impacted are in the dark as to where they went wrong with their onsite SEO.