Several respected members of the SEO community are reporting that a prominent Google engineer has more or less admitted to the existence of a "Sandbox" effect during a session at SES in San Jose, California. The unnamed engineer basically admitted that all sites are subject to a "probationary" period of sorts regardless of merit. This period can last anywhere from six months to 12 months.
The Engineer also joked that Google does not refer to this probationary period as a "sandbox".They don't really have a specific name for it butsaid that they are amused with the moniker and decided tonickname the company volleyball court, located in the googleplex, "The Sandbox".
According to the engineer, the purpose of this probationary "sandbox" period is to allow Google time to determine how users react to a new site and who links to it, etc. He went on to say that this effect is in now way related to Adwords or any financial considerations favoring Google.

Of course, jaded webmasters continue to insist that the so-called "sandbox" is just a way for Google to force people in to spending money on Adwords. Some are actually dismissing the Google engineer's statements altogether. Oh well, I guess some things never change.