This is why I think it'd be great to see Google release all the 40,000+ test queries which Google/Matt Cutts took back in 2000. It would help to put to rest some of the "Google is regressing and getting worse" debate one way or the other (and I suspect by showing that such talk is more sensationalist than accurate; I think Google search has improved a fair amount).
The article does make some interesting points, and I am a bit confused at the supposed sequence of events with the JC Penny/NY Times story. Plus it does raise the question of why a company who previously has had some SEO issues was - apparently - able to game Google's rankings in such a major way (using such spammy methods) without Google picking up on it for months.
That's a conclusion point from the article which I think is a well founded one.
As for the other points in the article's conclusion though:
>> "But all the evidence suggests otherwise. Demand Media is worth $1.6 billion, and their entire business is based on pushing cheap, useless content into Google to get a few stray links. If Google was good at search, Demand Media wouldn't exist."
"wouldn't exist" is subjective. If Demand Media weren't pumping out content, what would rank in its place? Part of Demand Media's success is that they are 'filling in the gaps' and covering content surrounding keywords which don't really warrant much competition. Sure this isn't always the case - and Demand Media's sites do sometimes rank highly for some rubbish content with other alternatives available - but in many cases it does seem to be at least part of the reason for DM's success.
Do I like some of Demand Media's content? No.
Do I like that Demand Media seem happy to have some pages with more adverts than content? No.
Do I think that Google et al should not even index some of their pages (some of which can at current rank fairly well)? Yes.
Do I think that there's many good alternatives to some of DM's content? NO. Unfortunately.
>> "And Bing wouldn't be making solid gains in search market share."
I might have different ideas about what "solid gains" means, although to me a percentage point here or there doesn't amount to much.
If - say - a Presidential candidate seen his/her opinion polls increase by 1 or 2%, you wouldn't see a bunch of stories saying how the candidate is making "solid gains".
In-fact, if a mainstream media source run an article on (say) a political party who seen a 2% rise in their opinion polls - and thus concluded that said party is making "solid gains" - I'd feel intellectually insulted and suspect the mainstream media source of bias.
So I definitely feel that this conclusion point is sensationalism (and inaccurate sensationalism, at that) and nothing more.
So all in all, a decent article which makes some decent points (at times). But it does also feel a bit of a shallow 'staying in the bandwagon' type of article, too.