Google has recently announced an update to its Penguin algorithm, this is the fourth such update and is therefore creatively dubbed Penguin 4.0.
What is Penguin?
Penguin is part of Googles search engine ranking algorithm. The primary function of penguin is to downgrade sites that are using spammy or so called "black hat" SEO techniques such as keyword stuffing, paying for lots of low quality links, or basically anything designed to game the SEO ranking system.
Penguin is now real-time
In the past Penguin adjustments were calculated only occasionally, and so while other parts of Google's algorithm can update very fast (daily or even quicker) a site that was hit with a Penguin penalty often had to wait weeks until the algorithm updated - even after they had taken corrective measures. Now however Penguin updates are calculated in real time, and changes will therefore take effect much faster, typically very shortly after a website is recrawled and reindexed.
Penguin is now more granular
While it's not yet entirely clear what effect this will have most SEO commentators believe the changes announced will mean that Penguin penalties are now applied at a page rather than site-wide level. The changes could also mean the downgrades only apply to certain keyphrases (i.e. the ones being spammed) rather than the entire site. On the whole this is good news although it may also mean Penguin penalties become harder to detect and therefore fix without a lot more careful analysis of a site's rankings over time.
How to avoid getting penalised by Penguin
The most important part of building back links is to ensure they are natural. This way you will automatically avoid any Penguin penalties. Avoid suffing keywords into anchors (instead focus on brand / domain anchors). Avoid always linking to the same URL from your backlinks, but instead try to target other pages on your site or even document / infographics. Above all avoid any obviously repetitive patterns in the type of sites you seek to acquire backlinks from, vary the quality and subject area of these sites.
Implications for local search
Another aspect of the Penguin update is to do with how Google ranks local search results. There have been a number of fairly subtle changes in this area but in summary the most important changes are:
Provide you're SEOing your site "correctly" and following good practice in acquiring backlinks there is nothing to get too worried about in this update. If anything this is simply a further step by Google to reward sites that are using SEO in a sensible and measured way and penalise sites that are trying to game the system or use black hat techniques.
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