I have seen some drop in traffic as well recently. Concentrate on creating better content. Write articles on a regular basis and update your blog/website often. Other than this, there is very little we can do. Of course you can build links but it will take some time before any change in rankings is observed.

Google Penguin works against Web spam. If you have use the black hat SEO or any unethical techniques such as Keyword stuffing, Clocking and hidden text than Google penguin definitely penalize your website. This update may decrease your website ranking.

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What did you do different to the website that dropped that you diddn't do to the one that remained? That should set you on the right track.

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Yep this is happening to a bunch of people lately.

Personally I think they devalued a lot the links that many marketers had which caused a big drop in rankings. When the links go away that were keeping you up, you're ganna sink.

Build better links and vary your anchor text.

-Omar

A relevant thread with more inputs can be found here.

Higher quality links (no blog networks or paid links like that) and anchor text variation are key. Google wants more natural links.

I agree with scottmacair that instead of building links first you shall check for the reason of the penguin penalty, First..

Nobody has really shown proof that variation of anchor text is key. Does it help to copy what's ranking in 1st page? Sure, but nobody has shown any correlation. In fact, I can show you many sites with no variations. Enough sample size to suggest its not random. Where you get links is the most important thing in and variation should be automatic because anybody with any clue would already Target multiple keywords and lsi in each article anyway.

You should build quality high PR links to recover.

thanks for sharing this graph, very good infomations

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For your education, here is a video released by the SENuke team that talks about Penguin and Panda. It's very good, but about 30 minutes long... so make sure you have no distractions:
SEnuke X, SEnuke Blog - SE Nuke, Search Engine Optimization Software

There's a lot of complain already about it, but as I have understand Penguin hates over SEO'd sites of over optimized so be careful on optimizing your websites Penguin loves natural links. Penguin punished those sites that are being optimize by spamming.

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