Please see What Marketer's Need to Know About Google's Panda 4.2 Refresh for the most up-to-date information about Panda.
Panda 4.0 is officially here. Matt Cutts confirmed this on Twitter last night.
Google’s Panda update was first launched in February 2011 to boost great quality content sites while filtering out low-quality content sites. Since then, there have been many updates to further improve this algorithm.
How Have Small Businesses Been Effected In The Past?
Google Panda was designed to improve search results for users by including more relevant websites. It was intended to attack content farms that were being used to manipulate search rankings for a website in Google. As a side effect, many small business websites quickly lost visibility in search results to big businesses.
The most recent Panda update affected about 7.5% of english queries, and actually helped many small businesses regain some lost ground in rankings.
What Does This Mean For Small Businesses Now?
Not many details have been released about Panda 4.0. Matt Cutts has announced that this update will soften the Panda algorithm in order to increase visibility for small businesses. We will have to wait to see more definitive results, but we can expect more visibility in search results for small businesses in local results.
Businesses affected by the update might benefit from taking a critical look at their content ensuring it's as robust and well written as possible, and ensuring their website has the best possible user experience possible.