Many webmasters around the world, including me, are facing a high decrease in Google search traffic and ranking these days. I was also very worried to see my 'search queries' graph with a huge downfall.

Heavy downfall in search queries graph

I could not find any issue with my site, though I removed all those stuffs which rarely could be cause of any penalty. But nothing helped me. I saw a long discussion on Webmaster help forum by people which were on same boat in which I was. Some were talking about "over SEO penalty" and some were considering Panda 3.4 update (w.e.f. from 24 March). But, conclusion could not be drawn.

Google Admitted the Bug

Finally, on 19th, Matt Cutts posted on Google+ about the issue.

I saw a recent post where several sites were asking about their search rankings. The short explanation is that it turns out that our classifier for parked domains was reading from a couple files which mistakenly were empty. As a result, we classified some sites as parked when they weren't.

I apologize for this; it looks like the issue is fixed now, and we'll look into how to prevent this from happening again.

Now it is clear for everyone that this is not related with "over optimization" or "panda update" but due to some error by Google, which classified some domains as parked but actually they weren't. This resulted in some ridiculous stuff as shared by my friend.

Recovery

I am still not fully recovered from this, but can see the graph is now tending upward with some positive hopes.

Have you lost and recovered from the bug? please discuss in comments.