Google updated their search engine algorithm back in July, including changes that would make a significant impact on search engine optimization marketers, especially those that work in local SEO. While Google didn't give a name to the update as it had with Panda and Penguin, the website Search Engine Land bestowed the name "Pigeon" to it because it was a significant change to the algorithm. They chose the name because of the update's focus on local SEO - pigeons always fly home.
The algorithm change will provide more relevant and accurate local search results that are more closely connected to traditional web search rankings. The update is not penalty-based.