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The Real Reason for the #6 Penalty?
Yes, the #6 Penalty (Bug) was confirmed by Matt Cutts to be an unforeseen side effect stemming from a change to Google's algo. Why was this particular change to the algorithm made?

I'm not trying to stir the pot here, but our lead programmer sent to me an interesting and possibly related article he found via Yahoo News titled, "Hackers Rig Google to Deliver Malware," written by Erik Larkin - PC World.

Our Programmer's comments follow below, released with his permission. Could he be on to something?

Article Summary:
"Beginning on November 24 and continuing for less than a week, bad guys loaded up more than 40,000 Web pages with malicious software and thousands of common search terms. They then employed an automated network of malware-infected computers--known as a botnet--to link to those sites in blog-comment spam and other places. The mentions elevated the position of the poisoned sites in search results, often to the first page."

Original Article: http://www.pcworld.com/article/id,141796/article.html.

With additional commentary via Yahoo News:
http://news.yahoo.com/s/pcworld/141796;_ylt=AsF3kCrzJXZ.VM3ydqRRXqgjtBAF

Our Programmer's Thoughts:

... I would order my tech guys to take immediate, brutal action to reduce the number of click throughs to the malware sites. Since the algorithms were evidently not able to identify the black hats, the only immediate option available is to fire off a shotgun that would catch not only the perpetrators, but also a lot of innocent merchants.

Home Page + JavaScript + High Ranking + Inbound Links = Possible Malware

Apply a brutal demotion to matching sites and you've got an explanation for the demotion to #6 behavior, including the fact that heavily linked sites paid the highest price. Demotion to #6 would cause a massive decrease in click throughs.

I know the symptom moved on to interior pages, but that's where I'd expect the second-wave of malware pages to move as well.

As the weeks rolled by, Google would've been able to refine their shotgun to catch fewer false positives. Ultimately they would add a module to their ranking algorithm and/or spiders to identify and suppress malware sites with 100% accuracy--and all returns to normal.

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