At Pubcon last year, Matt took a question about Google's stance on Content Farms. He said he and other people on the web team were having "internal" debates on what constitutes web spam. He even named Mahalo specifically.
I believe he gave the analogy that there is a "bar", content above the bar is good, below spam and the signals they are getting from many content farms is above the bar. He'd argue some of it is below.
So we can assume by this blog post we will be seeing some actions for look for these signals.