Search engines may penalize sites they discover using black or grey hat methods, either by reducing their rankings or eliminating their listings from their databases altogether. Such penalties can be applied either automatically by the search engines' algorithms, or by a manual site review. One example was the February 2006 Google removal of both BMW Germany and Ricoh Germany for use of deceptive practices.[54] Both companies, however, quickly apologized, fixed the offending pages, and were restored to Google's search engine results page.[55]

Website owners recognized the value of a high ranking and visibility in search engine results,[6] creating an opportunity for both white hat and black hat SEO practitioners. According to industry analyst Danny Sullivan, the phrase "search engine optimization" probably came into use in 1997. Sullivan credits Bruce Clay as one of the first people to popularize the term.[7] On May 2, 2007,[8] Jason Gambert attempted to trademark the term SEO by convincing the Trademark Office in Arizona[9] that SEO is a "process" involving manipulation of keywords and not a "marketing service."
QUOTE: “(Google Panda) measures the quality of a site pretty much by looking at the vast majority of the pages at least. But essentially allows us to take quality of the whole site into account when ranking pages from that particular site and adjust the ranking accordingly for the pages. So essentially, if you want a blunt answer, it will not devalue, it will actually demote. Basically, we figured that site is trying to game our systems, and unfortunately, successfully. So we will adjust the rank. We will push the site back just to make sure that it’s not working anymore.”  Gary Illyes – Search Engine Land
In 1998, two graduate students at Stanford University, Larry Page and Sergey Brin, developed "Backrub", a search engine that relied on a mathematical algorithm to rate the prominence of web pages. The number calculated by the algorithm, PageRank, is a function of the quantity and strength of inbound links.[22] PageRank estimates the likelihood that a given page will be reached by a web user who randomly surfs the web, and follows links from one page to another. In effect, this means that some links are stronger than others, as a higher PageRank page is more likely to be reached by the random web surfer.
Another excellent guide is Google’s “Search Engine Optimization Starter Guide.” This is a free PDF download that covers basic tips that Google provides to its own employees on how to get listed. You’ll find it here. Also well worth checking out is Moz’s “Beginner’s Guide To SEO,” which you’ll find here, and the SEO Success Pyramid from Small Business Search Marketing.