Google pushed through a number of updates to their algorithms a few years ago. Each update had a code name, and they caused significant pain within the SEO community. Because Google basically pulled the rug out from the entire industry.
The Penguin and Panda updates to the algorithm changed how sites were ranked. Completely. Suddenly, if Google thought that the links to your site had been created as part of an SEO (cough spamming cough) campaign, it immediately penalised you. If Google thought that you had been stuffing keywords into your copy, it immediately penalised you. There were wails as millions of websites plummeted down the rankings overnight.
Now, when you buy a domain, a good SEO will perform "backlink analysis" on it. This means checking to see if any previous owners of that domain had performed a shady SEO campaign, seeing if there are links from dodgy neighbourhoods, and if so, starts a clean up process, disavowing those links.
And, as for how Google ranks sites today? Well, that's tomorrows letter.
Take action: If you're not as high as you expect in the rankings, have you tried a backlink analysis?