Google has indeed been very active of late, and they have been experimenting with their SERP and algorithms quite aggressively. Webmasters around the world were in for a roller-coaster ride when the top sites fell out of the index entirely, and several low-quality websites gained first page rankings almost overnight.
Matt Cutts, the official spokesperson for Google was in for a tough ride too. He was battered with questions after questions, and he rather confessed in one of the SEO discussion forums that it was a slight mistake from the Google Engineers. It so happens that one of their algorithm updates was made without any prior testing and full update. He also went on to add that the problem is being looked into, and hopefully, the rankings will restore to their rightful place.
No one should be surprised about this, and we can expect further mayhem in the coming weeks and months. Well, it is certainly exciting time for us SEOs.
What can you do right now? If you have a ethically built and optimized website there is isn't much to be concerned about.
1. Make sure that you are constantly making updates to your content. Search algorithms are constantly crawling and indexing new information.
2. Be careful you aren't over optimizing your website. For example if you have a keyword density higher than 2% for a certain keyword rewrite your content to include variations of the keyword.
3. Stay away form all paid linking schemes. Google cracked down on this hard a year ago and are only getting more strict on the criteria of a "legitimate link".