"Short" introduction, since I'm new here: I work for a small company that owns a little over a dozen domains. Of these websites, only one has been impacted by Google's February 23-34 update (~40% drop in total traffic; >50% drop in Google traffic alone). It also happens to be our most-trafficked site.
I admit that some of the content on the affected site could be considered "thin", but the same could be said for the unaffected sites, too (some actually being worse, in my opinion).
So, naturally, I've been keeping an eye on what others have been going through, too.
I'm also fairly new to SEO, so feel free to correct me on anything I say below that just doesn't align with what's already known.
From what you've read where? And how do you reconcile that with Google's long-standing position that your site can't (ordinarily) be sabotaged by what third parties do on their own sites?
There seems to be a tendency for everyone to look at their drop in traffic as the application of a penalty. What if isn't a penalty at all? I've seen others allude to this elsewhere on this forum, but what if it really is simply the removal of a previous benefit?
Dan01's comment about incoming links made me take a look at the incoming links on our one affected site and compare it to the unaffected sites. What I noticed was that the affected site, according to GWT, has over 100,000 incoming links from a single, third-party website (~200,000 total). On our other sites, incoming links from a single source don't even break 5,000 (~25,000 total).
Now, the website sending those 100,000 incoming links claims to be a search engine for the market that our affected website falls under. It also appears to be legitimate, although more of a directory than a search engine proper.
I can't seem to locate any public statistics for that site, though. Alexa has no historical data. If that's because the site doesn't receive any significant traffic, that may be telling.
So, I'm wondering... What if the previous love from Google for our affected website was in significant part due to the sheer number of incoming links from this one site? If so, and this is something now taken into account in the Panda update, it seems reasonable that all those "votes of confidence" from a single source no longer weigh as much as they used to.
Admittedly, the above relies on my ignorance about how Google treated "a ton" of links from a single source prior to this update. If it already saw over 100,000 links as "too much" and discounted most or all of them out of suspicion, then my theory is bunk.
Also, as others have suggested, the linking site itself may have been impacted significantly by the update.
Being new to this, I'm even more in the dark than most of you, but I thought I'd share what few thoughts I have on the subject. :o)