The Penguin update was on 24th April, 2012 and subsequent updates to the same happened a few times thereafter.
Here are the main reasons for the Update....
1. Google Makes More Money Through Adsense - Yes. The biggest reason for the Penguin update is this one. Google makes a lot more money now than they did before the Penguin struck us.
We are so busy trying to get back our lost traffic and SERPs that we failed to realize how poor our earnings from Adsense have become.
Google has managed to completely eat up all our adsense earnings by stating that their publishers are giving them invalid clicks. One wonders why these invalid clicks were not tracked before.
Also, a lot more ads are now directly shown on Google search results pages than were shown before the Penguin update. Most Adsense publishers have reported a 50% drop in their earnings since the update. Go figure!
2. Google Makes More Money Through Adwords - Another big reason for the Penguin to fly into our lives. Not that Penguins can fly!
Now, most website owners have no choice but to advertise purely through Google ADWORDS since Google managed to completely kill all autoblogs that sell text links. Most text link selling websites and link building networks have been wiped off too.
Website owners saw their SERPs dip wildly after 24th April, 2012. They have no choice now but to advertise on Google to get the traffic coming in to their websites.
3. Google Wants Their Social Network To Be No.1 - Yes. Now, most search results for most keywords will display results from the Google+ social network. So, most website owners are literally forced to start using their Google+ accounts or they will lose out on a lot of traffic to their websites.
4. Google Knows What Most Of Us Don't Know - Yes they do! Google knows that each year between April 15th to June 31st there is a huge drop in traffic to their homepage. Infact, there is a huge drop in traffic to most websites online.
The only websites that thrive during this time are the file sharing websites and social networking websites.
The drop in traffic is attributed to most visitors being busy with other areas of their lives at this time.
Many web businesses have suffered massive losses since April 24th, 2012. The main businesses that are going through huge losses right now include big names like PayPal, Godaddy, Ebay, Facebook, Sedo, and more.
Most webmasters are extremely scared to invest in anything right now. They are silently hoping that things will go back to the way they were before the Penguin update.
Hijacking the Facebook IPO and messing up the capital funding for many big websites online could be the other big reasons for the Penguin update.
One thing's for sure. The Penguin was not imported in to improve Google's search results. The search results have been the worst on Google ever. Most users are now finding it difficult to find the right kind of information quickly. They end up spending more time on Google than they did before. Because finding the right information now takes much longer.
All this is working out completely in favor of Google. So, instead of Google losing a chunk of their market share to Bing or Yahoo; they are actually gaining more of it.
Even webmasters spend much more time on Google Search than they did before the update. They try to find out why all those other websites are ahead of them in the SERPs. This way they spend more time on Google than they ever did before.