I don't think it's lying about the position as Codelearn comes up #17 for me for 'rails tutorials'.
However, any position beyond #10 is pretty much useless on anything but the most popular terms. People just don't tend to venture that far. The difference between position #17 and #40, say, will be like fighting over 0.0001% vs 0.0003% of the audience (not real numbers, just to illustrate a point).
Agreed. Depending on the search the #17 position might not appear until the third page. The vast majority of people don't get past the top three results and almost no one makes it to the bottom of page two or page three. You might get one extra visit a month moving from 40 to 17.
Also the penguin update doesn't specifically penalize new sites. It was primarily directed at sites with unnatural back link profiles.
However, any position beyond #10 is pretty much useless on anything but the most popular terms. People just don't tend to venture that far. The difference between position #17 and #40, say, will be like fighting over 0.0001% vs 0.0003% of the audience (not real numbers, just to illustrate a point).