In a blog posting late yesterday Google announced it had tweaked its search algorithms--trying to improve its ranking accuracy, and affecting trillions of search queries. It's good for Google and its users, but it may actually be terrible for a number of other businesses. As we've said before, looks like Demand Media got its IPO just under the wire.
Google's blog noted the changes were being made as part of its mission to "give people the most relevant answers to their queries as quickly as possible," which means it must constantly tune its algorithms "as new content--both good and bad--comes online all the time." Recently, Google's search quality leader Matt Cutts wrote that "...People are asking for even stronger action on content farms and sites that consist primarily of spammy or low-quality content.... We can and should do better." Google has constantly added spit-and-polish to its search powers because the very data it searches through is evolving very fast. Most changes are "so subtle that very few people notice them," Google notes, but now it's just launched such a "big algorithmic improvement to our ranking" that the tweak "impacts 11.8% of our queries" and Google felt it had to let people know about it.
The adjustment has been to "reduce rankings for low-quality sites," which Google defines as those having "low-value add for users" or which "copy content from other websites" or "sites that are just not very useful." Simultaneously "high-quality sites" with "original content and information such as research, in-depth reports, thoughtful analysis and so on" will have their rankings boosted.
Despite the company's statements to the contrary today, the change is very bad for Demand Media, a human-powered content farm specializing in churning out huge amounts of content, peppered with ads, for very little cash input. Demand's EVP of Media and Operations Larry Fitzgibbon said in a public statement today that his firm built its "business by focusing on creating the useful and original content that meets the specific needs of today's consumer," so "naturally," it applauds "changes search engines make to improve the consumer experience." DM has seen "some content go up and some go down in Google search results" as a consequence of the algorithm changes, which is "consistent" with what Google expected, and typical for a "content library as diverse as [Demand Media's]." He says, "It's impossible to speculate how these or any changes made by Google impact any online business in the long term," but just for now DM hasn't seen a "material net impact" on its content business.
Perhaps his own company's pre-IPO S1 filing would offer a clue as to the impact of such a change in Google's algorithm and the sea change it signals. That document explicitly warns: "Internet search engines could decide that content on our owned and operated websites and on our customers' websites, including content that is created by our freelance content creators, is unacceptable.... Any reduction in the number of users directed to our owned and operated websites and to our customers' websites would negatively affect our ability to earn revenue," which would force DM to make more costly efforts to drive traffic to its sites, adversely affecting its profitability.
In short, low value-added content farms are in deep doo-doo thanks to Google's effort at improving the product it delivers to its customers. And apparently this is coming not from an arbitrary decision by the search engine but from a groundswell of complaints about content farms. While Demand Media is one of the biggest and most egregious gamers of search results, AOL, with its SEED program, which relies on thousands of writers creating new material for its stable of sites, and Yahoo with its ambitions to hire 400,000 writers for its own content mill, will surely react to the changes, too. A fair guess might be that both focus attention on improving further the quality of the content.
Google's algorithm changes are being trialed in the U.S. at first, but will probably spread quickly around the world--and Google already thinks it's successful because the algorithmic change suppresses 84% of the top most-blocked domains that users themselves quash using the Google Chrome "personal blocklist" facility, despite there being no direct link between the two bits of code.
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