New Google Search Updates Seem To Be Putting The Kibosh On Demand Media Sites

In February, we predicted that Demand Media IPO'd just in time. New data about Google's search changes suggest we might have been right.

When Google released anti-spam updates to its U.S. search algorithms earlier this year, eHow seemed doomed.

Content farm masters Demand Media years ago transformed the site for the chief purpose of ranking high in Google resuts (and then raking in the clicks and ad dollars that come from such high visibility). But after Google's recent tweak, Demand boasted that their content actually surged in rankings.

Now it appears the reports of their endurance might have been premature.

Earlier this week, Google released its anti-spam updates (codename "Panda") globally, and Demand seems to have taken a hit. Over on SeekingAlpha, former hedge fund manager Tim Chen, who has been tracking traffic to Demand sites, says the properties have been losing hits since the Monday's rollout. 

"On April 12, we noticed a ~15% decline in eHow ‘top 10 search results’ on our keyword list in the morning, and a ~32% decline by noon, the day after the international Panda rollout," Chen writes. "Ranking per hit has also gotten worse, by over 1 placement on average across over thousands of search terms." (See his post for charts.)

"While this could be a blip," continues Chen (who discloses on the investment site that he himself is shorting Demand), "we think it’s an indication of a permanent change in how Google values content from providers like eHow."

If the trends continue, Demand Media might have to go back to the drawing board. Back in February, former eHow co-owner (and now VC) Josh Hannah told GigaOm he thought the Demand Media business model, which relies on poorly paid content developers and articles of dubious quality, was going to have "a lot of challenges in when it comes to making that work over the long term. 

In light of the new information on SeekingAlpha about the impact of Google’s changes on Demand content, Hannah now says over on Quora, "changes of this magnitude will be devastating to eHow’s business." 

Yesterday, we reported that, during the company's quarterly earnings call, Google executives revealed that the search tweaks had impacted 12% of all searches. They also said they had had "adverse impact" on some of the advertisers in their display ad network.

Read also: Did Demand Media IPO Just in Time?

[Image: Flickr user Gibson Claire McGuire Regester]

E.B. Boyd is FastCompany.com's Silicon Valley reporter. Twitter. Email.

 

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1 Comments

  • Doug

    None of these outside tracking services are an accurate measure of the percent gained or lost due to Panda. Ask any webmaster that made the initial Sistrix list and they'll tell you that gain/loss estimates were WAY off. It does show the general direction, but be careful not to assume the demise of a company due to these 3rd party tracking services. Do your reporting and call up Demand Media, or wait for their quarterly report early next month.