Just a few days ago, Answers.com (NASDAQ: ANSW) put out a press release noting a sudden 28% drop in its site traffic, and blaming the drop on recent changes by Google to its search algorithms. There's more than a little bit of irony here, because Google has been using Answers.com as its default content provider for users seeking definitions of specific terms. What Google is giving Answers.com with one hand it now appears to be taking back with the other.
As several search engine pundits have noted, when other companies complain publicly that they have been hurt by changes to the Google search algorithms, Google typically responds with the corporate equivalent of a shrug.
Occasionally however, Google does respond. As I noted in a post back in March, a company called Topix.net which wanted to start using the topix.com domain name, made a public plea to Google to "transfer" its search engine rankings to the new domain so it wouldn't have to take a traffic hit. Google's response was that companies shouldn't become so reliant on search engines for their traffic. That struck me as an incredibly disingenuous statement at the time, but I wonder if the market isn't now beginning to take that statement to heart.
As it happens, Answers.com is in the midst of trying to acquire Dictionary.com, and plans to go through with the acquisition despite the precipitous drop in traffic to its own site. Rationale? Dictionary.com has a very high percentage of "direct traffic," traffic that comes directly to Dictionary.com and not via search engines.
What we may be seeing is the start of a new, more nuanced way of operating in the traffic economy in which all web visitors will no longer be considered equal. Quite possibly, we'll see start to see websites with substantial direct traffic being valued more than those sites with primarily search-derived traffic.
Implications? Huge. Google, by endlessly tinkering with its algorithms, has created an environment where it's increasingly difficult to build a secure and sustainable web property. As a consequence, websites will put a new emphasis on building direct traffic, simultaneously increasing their enterprise value while reducing the power of the search engines. And the primary beneficiaries will be established sites with large repositories of quality content that users want and need to use repeatedly and will navigate to directly. This shift won't happen overnight, but if I'm calling it right, a fundamental, tectonic shift may be underway that will put content providers with loyal repeat visitors in the driver's seat.
Labels: algorithms, answers.com, dictionary.com, direct traffic, google