claarky, my apologies, I posted above before noticing the pages 2,3,4, now have read the rest.
"Links are now completely useless to you unless they drive traffic to your site and the visitor then interacts with your site in a way that looks natural or perhaps reacted well to your site. Any anchor text attribution will only have impact if the link is there for genuine reasons AND drives people to your site who like it."
I want to add in my support for your rough view, and also to agree with what leosghost, and I, by the way, have always known and acted on with my own sites. My sites never see any issues with google updates because they are designed to give the users what they were looking for in all cases. The sites I do that do not do well in google do not do that, consistently, but I don't do those sites for google, I do them for me, and a handful of friends, plus anyone else who might stumble on them during some surfing.
To be concrete, I've referred to client's site, we'll call it x. This site is probably guilty of all 9 categories of bad user experience, bad usability, dupe content, and so many other things it's not worth mentioning. But the thing that strikes me very specifically is the notion of exit page re the seo generated spam links, which are themselves something I assume you are totally not considering because you simply did not do them, but let me assure you, if you did, all the issues you experienced would be amplified in terms of traffic drop by about 4x or so.
To the point, our bad outsourced seo (man, let me warn you, do NOT price shop seo, it will kill your site) linked to about 6 to 10 target pages, all category index pages. All those target search terms, plus one they had somehow missed but caught in the last two panda updates, and anchor text repetitions, ALL pointed to index pages for sections, almost none pointed to the actual page, because, frankly, it takes work for the seo to actually write an article that is topically related to the target page, and to make anchor text that actually refers to the content of the target page. That is human, not machine behavior, and I am virtually certain that the black hats are now correcting this obvious and sloppy oversight on their part.
Leosghost, as usual, I agree with your more meta analysis, particularly this: Making shedloads of money is almost a sideline as against the heady drug of "influence" over such huge numbers of people and society in general at the moment and well into the future..
It's worth noting that George Soros, a man who also requires no seo to get his name or products out there, also engaged in his initial finance experiments not to get rich, but to verify a specific theory he had about human behaviors, a theory he explains to some degree in 'The Alchemy of Finance'. Needless to note, his experiments were largely successful, and validated his philosophical theories.
Now as to the raw idiocy and incredibly ignorant treatment of the world's books in google books scanning project, well, don't ever try to read or even look at one of those scans if you love books is all I have to say, the world is better off without them. Clearly the only part of the world google guys can grasp and work with is the purely virtual one.
I want to note a few other things of interest re our site, x: our user demographic is about the least likely to use google chrome out there. And of users of google chrome out there, they are about the most likely to leave because our site was not actually what they were looking for. And I believe that could actually be a part of the problem, it's possible that google's treatment of the toolbar and chrome data does not actually take into account the demographics of who uses MSIE, Firefox, or Chrome. That's my guess anyway.
I have been after client for years and years to improve user experience and put users first.
Also of note, the sites we run that were not impacted much, no section/category index pages, no link farm bulk links to section index pages, both have unique and valuable components of the site that do not exist on any other website.
In a sense this is, as claarky notes and leosghost reinforces, just a confirmation of what I have always known and practiced on my own websites, and what an seo can NEVER do for you at any price, ie, actually makes something worthwhile for your visitors. It's not hard to figure out why, if they could do it, they'd do it, and wouldnt' be seos. There is one exception, when seos write good stuff on seo, but that is not something that you can buy, Danny Sullivan is his own product, and he sells it to you. Just like any other good site.
I don't read routinely any website because of seo bringing me there, I read it because I was following other links and finally realized I was ending on the same site all the time, and that is a quality signal that is obviously something an algo can work with.
In now way however do I want to discount the abilities of black hat seos to find ways to emulate the behavior of real sites (can someone say: automated chrome surfing sessions...) and real users, they will solve these issues in my opinion, at least the smart ones will, and they will laugh, as they usually do, but that's not related to anyone's real sites, and you can't worry about that part that you cannot change.
The negative seo however is an issue I do worry about.
I should apologize by the way for just dropping in then vanishing, but I do not get paid for this type of work, I already know how to do it right, and have always known, since at least 2003, how to do it, so the only reason I have been forced to dip back into the world of seo sleaze etc was because we lost and continue to lose a major site, but that's our fault.
claarky, while incomplete and ignoring penguin, I think your thinking on this is quite good, about as good as anythng I've seen. I can't contribute exit/bounce page stats because frankly I do not get paid for my time on this garbage, but I do need to keep the client from falling into more seo traps in the process of figuring this out (and let met tell you, AVOID seos at this point, like the plague, the white hats have almost no clue what they are doing from what I can see, and the black hats are working on their new software and link networks, and I expect to see higher quality and more highly focused articles being generated by them soon.
[edited by: lizardx at 10:00 pm (utc) on Jun 28, 2012]