Serena Williams was never considered a lock to win the 2012 Australian Open, however the American was considered the favorite for the event, until very recently.
On December 26th, Williams had odds of +275 (11/4; Sportingbet) to win the title in Melbourne Park in January. Those were the longest odds available with the sportsbooks listed at oddschecker.com although now that site lists Williams at +350 (7/2) with multiple sportsbooks (ie. Bodog).
Williams allegedly suffered an ankle sprain at WTA Brisbane and, although she won her second round match there against Bojana Jovanovski of Serbia, Williams has pulled out of the tournament.
As a result, Daniela Hantuchova of Slovakia has received a walkover in the tournament's quarters. She is already into the semifinals as a result, where she awaits the winner between Iveta Benesova and Kim Clijsters, the reigning Australian Open champion.
Petra Kvitova, the world No. 2, is now the favorite to win the 2012 Australian Open with multiple sportsbooks, including bet365 (+333; 10/3).
Assuming that Williams' ankle sprain is nothing severe, which is my personal opinion on the matter given that she won her match still, you have to think that the news of the injury could help the American. With whispers of her being at less than 100%, the pressure for her to win the title in Melbourne Park is reduced to a degree and expectations shift to the other favorites, including Kvitova.
The draw for the 2012 Australian Open will be released next Friday, Jan. 13th. Williams is now the second favorite, but if the ankle injury is just fluff, there's no reason to be overly concerned about her playing status.
I think when the women's draw starts on Jan. 16th, Williams will be fine and she'll be making quick work of her first round opponent.