One of my blog is around 3 months old, it’s in money making niche. I was on page one for some long tail ‘make money’ keywords, and receiving around 200 unique from Google search, suddenly my traffic dropped to around 5 to 10 unique and when I searched Google I could not find my site for most of my keywords which previously where on page 1. My blog went without visitors for around a week, then I started using AdWords to draw traffic to my blog, I bid on the lowest possible amount as getting in to page 1 was not important for me, and after 2 days of running AdWord, My Google natural traffic jumped back to 200 unique per day and my blog again appears on page one for my keywords. Can anyone explain what happen?
It might have been just coincidence. I did see this happening a lot. In the event that you quickly drop rankings you can do 2 things: check your back links that you might have had through reciprocals or paid links and wait a little. Continue working and optimizing and if after a few weeks you are still not ranked properly, there might be a serious problem somewhere. Such variations in placements have happened in the past. Some people think that it is the effect of Google Sandbox while others think that it just happens. I doubt that there is anyone that can properly explain this if it is not linked with back links.
New sites/pages often rank initially and then settle down to lower ranks, its not a new thing. Most likely, you will be back again (not at same position though) for the keyword(s).
1 week is a bit long. I have seen such fluctuations for 2-3 days earlier. The results are mostly datacenter dependent in these cases.