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

|About: eBay Inc. (EBAY)|By:, SA News Editor

An analysis done by SearchEngine Journal estimates (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%) 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.