This is a new Google algorithm update introduced on April 24, 2012 aimed at decreasing rankings of over-optimized websites that are stuffed with keywords and violate Google Webmaster Guidelines. This is commonly known as curtailing link spam. Google estimate that the update will affect less than 3.1 percent search queries. Before Penguin, Google used Panda to downgrade websites that produce a poor user experience. Google rumored to have come up with Penguin 1.1 which fixed some sites that were inadvertently affected by the earlier Penguin update.
Being on the top of Google search ranking is highly sort after result. Therefore, Web was quick to criticize the new Penguin update indicating it hurts small businesses. Also there were ample efforts to find Penguin recovery strategies. SEOMoz published a blog on WPMU.org showing how they recovered along with a graph showing a recovery time line back to pre-Penguin traffic levels. WPMU.org is reportedly one of the many sites hit by the Penguin update.
Penguin update also affected several travel sites. What all of them had in common are low quality sites with over-optimized anchor text. Unless they do some cleaning and reinvent their online marketing strategy, they may not recover soon from Penguin update.