Seeking Alpha

Google algorithm change dings eBay traffic, could force it to buy more ads

  • An analysis done by SearchEngine Journal estimates eBay.com (EBAY -1.1%) has seen a 33% drop in search traffic thanks to Google's (GOOG +1.3%) new Panda 4.0 algorithm update, and InterActiveCorp's (IACI -1.1%) Ask.com a 50% drop.
  • Moreover, David Kim, the CEO of SEO firm Wordstream, has done an analysis that suggests eBay has "lost around 75%" of its keyword terms from Page 1 of Google's results, and 80% of its more specific (i.e. long-tail) keyword results.
  • Kim blames the falloff on the fact eBay's search traffic tends to involve doorway pages with "very little content," rather than actual product pages. "I’m surprised that Google has allowed these shenanigans to go on for so long."
  • He thinks Google's move has the effect of forcing eBay to buy Google's increasingly popular product listing ads (PLAs) to reach search users. eBay is already a PLA client, but (like Amazon) is less dependent on Google ads (and Google traffic in general) than many smaller e-commerce firms.
  • The algorithm tweak follows changes to the display of Google's AdWords text search ads that lead them to blend in more with organic results, and thus potentially make them more likely to be clicked.
  • eBay and IAC are underperforming amid Panda-related worries, but they're faring much better than RetailMeNot.
Comments (24)
  • James Sands
    , contributor
    Comments (1911) | Send Message
     
    So Google's business goal is basically to make you dependent on them and then throw you under the bus if you don't cooperate. Man I'm glad Facebook is kicking their butt in social and mobile ad growth. Good thing eBay is large enough itself as the 7th highest web traffic property in the U.S.

     

    I think most people go to eBay and Amazon directly to look for merchandise anyways and use their internal search platforms.
    22 May, 03:12 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (3187) | Send Message
     
    I use DuckDuckGo rather than Google for searching. It gives me actual search results, not results skewed by keyword advertising. It does highlight Amazon results, and if I click through to Amazon, they do get a referral fee. That's fine, they have to make money somehow and I'm not paying them. But I like knowing that my search engine is giving me objective results without tracking my every move.
    22 May, 03:24 PM Reply Like
  • Bob Dean
    , contributor
    Comments (9) | Send Message
     
    Who knows? Maybe their true goal is to make organics less dependable? This is, I think, an interesting version of how "greed makes the world go 'round". Those affected by Google's "greed" will have to find other ways to reach customers. In the short term, Google may make more income coercing companies to spend on ads, but, in the long term, these companies may find other ways to reach customers that doesn't include Google. Just a thought...
    22 May, 03:57 PM Reply Like
  • kata
    , contributor
    Comments (441) | Send Message
     
    This is what monopolies do.
    22 May, 09:17 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11014) | Send Message
     
    Google's algorithm is actually positive and weeds out the blatant sales pitch websites when you are looking for something relevant. I do like DuckDuckGo as well and encourage people to use it as well. It is less cluttered with garbage ads and promotions and may be one thing Google is trying to respond to. It's searches are becoming as garbagey as everyone else in the field. Even Bing sometimes pulls up more relevant things on searches these days.
    23 May, 01:37 AM Reply Like
  • JackBarton
    , contributor
    Comments (18) | Send Message
     
    Agree with you on Google's algorithm, regarding Bing, I am not sure, I think they also recently changed the search algorithm and now it is not so effective as it used to be.
    23 May, 02:21 AM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    Meanwhile GOOG is my cash cow
    22 May, 05:17 PM Reply Like
  • James Sands
    , contributor
    Comments (1911) | Send Message
     
    How much upside does Google have from here? Market cap near $400 billion...Even if we give them a 10-yr future market cap around $1 trillion and depending on dilution, they could only return around 6% per year or less per year over the next decade....

     

    eBay's growth prospects are better, and they are not such a bad cash generating machine either.

     

    But I stand by my earlier comment, Facebook is sticking it to Google. Maybe autonomous vehicles will be the next thing for Google. Peloton Technology would say otherwise.
    22 May, 05:32 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    FB is sticking it to Google?

     

    Just look at a chart or the price history to see how ridiculous that comment is.

     

    Also > FB PE 78.50
    > GOOG PE 28.56

     

    Nuff said
    22 May, 07:30 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    FB revenue = 8.9B
    GOOG revenue = 62.29B

     

    FB revenue per share = 3.63
    GOOG revenue per share = 93.17

     

    FB net income = 1.91B
    GOOG net income = 12.34B
    22 May, 07:36 PM Reply Like
  • James Sands
    , contributor
    Comments (1911) | Send Message
     
    Google is actually is Google's cash cow, I don't see any cash cow dividends extending to shareholders. And cash in tech is a waste. Many old-tech companies are still hanging on to cash which hasn't turned into anything for years.

     

    Union Pacific's growth will outperform Google over the next decade.
    22 May, 09:22 PM Reply Like
  • JackBarton
    , contributor
    Comments (18) | Send Message
     
    GOOG works for me good as well.
    23 May, 03:24 AM Reply Like
  • The Fox
    , contributor
    Comments (623) | Send Message
     
    You conveniently left out an important one...

     

    FB earnings growth for 2014: 96%
    GOOG earnings growth for 2014: less then 20%
    22 May, 09:00 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    Here's what I know...I bought FB at $35 sold in the mid 60's.

     

    I recently bought GOOG at $517 average and sold half at $528.65 days later
    and am now looking at an almost 30 point gain in less than a week.

     

    So post all the stats you like showing which is better but I held FB along time to get those 30 points and with GOOG it took less than a week. FB has been going (as I predicted a good while back) sideways and will continue to do so until earnings.

     

    I am happy with them both and frankly could care less who thinks which is better as long as I keep making money.
    22 May, 09:15 PM Reply Like
  • James Sands
    , contributor
    Comments (1911) | Send Message
     
    I'm not interested in short-term gains, they pale in comparison to long-term performance, and long-term Google's growth is slowing.
    22 May, 09:28 PM Reply Like
  • kata
    , contributor
    Comments (441) | Send Message
     
    I wouldn't underestimate Goog but FB just has more room on the runway and Zuckerberg is one heck of a pilot..
    22 May, 09:35 PM Reply Like
  • greenspan76
    , contributor
    Comments (29) | Send Message
     
    So you bought FB last July and sold it recently for an 86% gain and now you think you'll make 6% weekly on GOOG? I guess I'm having trouble understanding your point here...
    22 May, 11:01 PM Reply Like
  • James Sands
    , contributor
    Comments (1911) | Send Message
     
    Kata,

     

    Agreed, Google is a great company, but their growth is a bit tapped out. If I'm looking to invest in growth tech long-term (10%+ return per year), I'm not considering Google. If they did put their cash to use by paying a dividend, then Google would become more interesting as a large-cap addition with fixed income growth potential.
    23 May, 12:04 AM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    @greenspan, I am in the business of making money.
    I did fantastic with FB and was merely pointing out that I have reaped the same amount of gains (in points) with GOOG in one week.
    Why read into my post something I didn't write?
    I never posted that this would be a weekly happening.

     

    Thats it, nothing real deep, no ridiculous predictions such as "Union Pacific's growth will outperform Google over the next decade."

     

    I mean thats just nonsensical claptrap by someone I'm guessing is short.

     

    I always post my entree's (when I actually enter) and my exit trades.
    I don't promote my long or short trades I simply write why, in my opinion,
    a stock will move in one direction or another.
    23 May, 05:45 AM Reply Like
  • greenspan76
    , contributor
    Comments (29) | Send Message
     
    @22643611: Fair enough. I was just unsure why you were comparing a $30 move on a $35 stock to a $30 move on $517 stock.
    23 May, 09:09 AM Reply Like
  • James Sands
    , contributor
    Comments (1911) | Send Message
     
    22642611,

     

    Pay attention to user profiles on SA always. I post my holdings and positions on every position I own on a quarterly basis. I owned Google a while back at $225/share. I do not own it now and I never short stocks (I like to make money).

     

    Let me give you some knowledge because you obviously are not familiar with how a different industry's business growth leads to stock appreciation and dividends over time. The rail industry is one of the top performing industries this past decade.

     

    Google's stock price has grown at 21% per year between 2004 and 2013. Union Pacific's has grown 20% not including dividends during the same period. In 2004 the dividend yield was 3.4% and from this level, has averaged another 10% growth per year, so in essence, your 3.4% dividend yield as of 2013 would have been 8.8%. So Union Pacific has outperformed Google since 2004 on a total return basis and will continue to over the next decade.

     

    The difference is Google is likely to return closer to 6% per year moving forward, while Union Pacific will return closer to 10% including dividends. Google needs to spread that cash cow money to shareholders a bit more in the near-term.

     

    Lesson 1 complete. Keep on learning buddy buddy. I am here to instruct you anytime you want.
    23 May, 03:23 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    Hey sport, I'm not your buddy.

     

    And here is what I do know. I shorted TWTR from $65 and made a lot of money. To post that you don't short because you like to make money shows
    a complete naiveté in regard to the market and trading.
    In regard to UNP, as I tell anyone who makes a nonsensical definitive prediction regarding the stock market years in advance that simply shows
    that someone is foolish.

     

    I (as I posted when I entered) bought GOOG at an average of $517 one week ago. I sold half my position at $528.65 (as I posted immediately after) for
    a quick 11 point gain (2 days later I think) and I am now looking at a 35 point gain on the other half in one weeks time but not selling yet.

     

    I have owned AAPL for well over a decade and will continue to do so.
    Enough shares to buy and sell you.

     

    Any time you would like a lesson on how to actually make money just let me know and I would be happy to oblige.
    23 May, 03:38 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    Google is said to be developing a new 7-inch tablet that can capture 3-D images, the Wall Street Journal reports. It plans to produce about 4,000 of these prototypes beginning in June.
    23 May, 07:16 AM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    Out GOOG at $555.
    38 points in 6 trading days.
    Amazing trading stock.
    27 May, 10:09 AM Reply Like
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