Monday, April 18, 2011

Does Google Search Change Spell Death for Demand Media?

It's a little early for producers of thoughtful content to crow about how eHow traffic fell 50 percent after Google changed its search algorithm last week. eHow producer Demand Media, of course, said that the effect of the algorithm change was "significantly" less than the 50 percent reported. The fact Demand Media didn't say how much less does mean that it must have hurt. As did an almost $7 drop in their share price during trading on Monday.

But that's not enough to break Demand Media's business model. Demand Media pays pennies per word or video byte compared to other content producers such as news organizations or magazine publishers, and it's lamentable that content created in response to searches gets traffic that should go to content created with greater standards in order to provide more value to readers. Changes in how search engines display results is certainly Demand Media's Achilles heel. But playing search engines is Demand Media's game so adapting to such changes is also part of their business plan. I wouldn't hold your breath unless Google gets aggressive about changing code frequenlty to avoid its engine being played.

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