What is Google Panda
Google panda is basically a new algorithm announced by Google. Its aim is to fight against content farms (duplicate content website).
Google started rolling out its Panda update initially in February in the US and later in April it reached a few other regions. The Google Panda update was made to reduce the amount of spam within the Google search results
Google panda is not a complete overhaul of the ranking algorithm but is a value that feeds into the overall Google algorithm. If it helps consider it as if every site is given a PandaRank score. Those low in Panda come through OK; those high get hammered.
The Panda Ranking Factor
Rather than being a change to the overall ranking algorithm, Panda is more a new ranking factor that has been added into the algorithm
Panda is a filter that Google has designed to spot what it believes are low-quality pages. Have too many low-quality pages, and Panda effectively flags your entire site. If you have a high Panda rank that doesn't mean that your entire site is out of Google. But what it does is adds a penalty to help ensure only the better ones make it into Google's top results.
Google keeps making small algorithm changes all the time, which can cause sites to fall (and rise) in rankings independently of Panda. It also keeps updating factors that feed into the overall algorithm, such as PageRank scores, on an irregular basis. Those updates can impact rankings independently of Panda. So far, Google has confirmed when major Panda factor updates have been released. If you saw a traffic drop during one of these times, there's a good chance you have a Panda-related problem.