Previously Google had started Google panda updates for thin and low quality websites and blogs. As a result many websites and blog were penalized. In April 2012 Google updates new algorithm like google panda, that is google Penguin. Google Penguin is also same as panda. google penguin also penalizes spam websites and blogs.
There are many blogs and websites on the internet. And Google is one of the top search engine. So Google crawling and indexing is very important for websites and blogs. Google finds spam websites and blogs and takes necessary actions. So automatically it decreases traffic and Page rank. This punishment is Google penguin updates.
Penguin has its effects on
1. Low quality websites and blogs
2. Virus and Malware
3. Copied and duplicate contents
4. Over SEO and URL submissions
5. Using tricks for increasing page rank .
6. Link exchanging. etc..
For information you must read Google quality guidelines and follow the instructions strictly. And also check your website or blog through Google webmaster tool everyday.