Tedster is ABSOLUTELY correct.
Previously, most here were like... Okay. I want to sell blue widgets. Buy the domain bluewidgets.tld. Go build a bunch of crappy links to it with "blue widgets" as the link text using unnatural link building techniques (blog commenting, forum sigs, article submissions, directory submissions, video submissions, etc.) and you rank at the top of page 1 and make a lot of $$$.
While this might be great for people here... it's generally terrible for users. Thus Panda, Penguin, EMD, and the future changes at Google.
You people need to think differently now. Those old techniques no longer work... and rightly so. Unfortunately, if you want to make money selling blue widgets on bluewidgets.tld, you actually have to do some "real" work now.
Before you even build content, you should be thinking things like:
Where on the web can I find people who would be interested in blue widgets?
Once you know all of the places where those people hang out online, think:
What can I build that those sites where my targeted users hang out would find useful?
What could I build or write that those sites where my targeted users hang out would WANT to link to?
Then build it. This is NOT typically a few hours or days worth of work. I'm spending on average 500-1000+ hours building out an affiliate site now. A lot of work... a long term investment.
Once I've build it, getting HIGH quality links to it is a breeze. And those sites have withstood and actually benefited from subsequent Panda, Penguin, and now EMD updates.
I'm emailing associations and such in my niche to tell them I have this great resource that will be useful to their users. Most would say this is a waste of time. But surprisingly, because I've spent so much time building out the content that users would have needed to spend days looking for, a very high percentage of the sites I contact actually give me a link on their site. And these are National and state associations in that niche. I'm getting a link for somewhere betwee 10-15% of the emails I send out. And the links on those sites drive a LOT of referral traffic.
I've spent the last year reading everything I can from Eric Ward and others about link building. Merit based link building is what he's been preaching for years. And it works. It's the closest thing to being "Google update-proof".
Natural, editorial links given by other webmasters because they think you provide some great resource to their users will ALWAYS outlast the quick and dirty, manufactured, unnatural links you build by "planting" links on other web sites using blog commenting, RSS, forum sigs, directory submission, article submission, etc. If you cannot get other webmasters to link to your site naturally just by letting them know that your content exists then your site is not worthy of ranking well at Google.
As Zivush said, it's ALL about providing value. If your site provides GREAT content, GREAT tools, GREAT value to visitors then getting backlinks becomes an absolute no brainer. And ultimately backlinks are going to make you rank. Simply having a great exact match domain for a phrase that gets a lot of searches monthly with a few crappy links is no longer going to get you to page 1.
Forget about search engines. Think about what is useful to users. Think about where those users can be found on the web. Think about how to get those sites where they can be found to link to you... Build it. Promote it. And you will win... and no update is going to negatively affect you.