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Newsletter SampleFREE IFN Newsletter Smacked By Google Algorithm

By: David Utter

The company recently made a $100 million purchase of the domain name and the firm that owned it. Answers is about to learn the wisdom of that investment. Smacked By Google AlgorithmAs Google gives, so Google takes away. What they have taken away from Answers has crushed Google search referral traffic to the site.

Answers reported a 28 percent drop in the traffic arriving from Google. CEO Bob Rosenschein said in a statement an algorithm change at Google that has pushed results down in its rankings:

"The major search engines modify their algorithms all the time," added Mr. Rosenschein. "This change only demonstrates the sound business rationale behind our agreement to purchase, because it underscores a primary motivation for the deal: to secure a steady source of direct traffic and mitigate our current dependence on search engine algorithms.

On a pro forma basis, we expect at least 70% of our total traffic to come from people navigating directly to our Web properties or typing the term 'dictionary' in a search engine.

If Rosenschein's strategy works for Answers, the $100 million will look like a shrewd bit of strategy. If it doesn't, he's likely to be forced to emulate David Hills at LookSmart who abruptly resigned from his CEO position the day before the company announced its second quarter financials.

Investors have responded in negative fashion. Shares of Answers (ANSW) have plummeted since closing at $8.77 on August 1st.

About the Author:
David Utter is a staff writer for InternetFinancialNews and WebProNews covering technology and business.

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