In Google’s penalty box, Overstock takes a 5% hit on revenue

[tedster]

Continued from: http://www.webmasterworld.com/google/4252178.htm [webmasterworld.com]

I often hear it said that big companies just get a slap on the wrist and then it's back to "business as usual." News from Reuters today shows that Overstock continues to take a real hit.

On Feb. 22, Google notified Overstock that it was penalizing the company for noncompliance with some of Google's search guidelines.

"As a result, we have dropped significantly in some Google natural search result rankings," Overstock said in a regulatory filing.

Google is not yet fully satisfied and continues to penalize Overstock in search results, the company added.

The lower Google natural search rankings has hurt sales during the penalty period to date by 5 percent and Overstock expects this to continue for the rest of the period.

[reuters.com...]


[internetretailer.com...]

Six weeks after getting penalized by Google Inc. for using promotional links with university web sites that boosted its natural search rankings, Overstock.com Inc. says the penalty—a drop in its Google natural search rankings—has resulted in a 5% drop in revenue, according to the retailer's filing toay with the Securities and Exchange Commission.

“We now estimate that it will be at least another two to three weeks before Google will end the penalty period,” Overstock says in the filing. “During the penalty period to date, we have experienced an approximately 5% negative impact on our revenue, which we anticipate will continue during the penalty period.”

Overstock says Google notified it Feb. 22 that it would get penalized for using a system of links to Overstock.com that were outside of Google’s natural search guidelines. The links were from Overstock promotions on university-related web sites—those with a w

[edited by: Brett_Tabke at 2:44 pm (utc) on Apr 9, 2011]
[edit reason] added quotes - started new [/edit]

[ken_b]

I dunno, maybe it's all relative, but.....

that was 2 days before Panda, right?

How many sites hit by Panda have recovered?

How many sites hit by Panda have taken a lot more than a 5% hit in business as a result.

Compared to the time frame and impact of Panda on some sites, we don't know if OS got a slap on the wrist or a real significant penalty.

.

[arikgub]

If Overstock is reading this thread, I'd like to apologize on behalf of the readers here

Speak for your own plz.

This is getting ridiculous. A multi-billion dollar company leveraging its capital, scale and domain authority to dominate search and bully small businesses, is experiencing a setback in revenue as a result of objective and honest scrutiny and we need to apologize.

Overstock, darling, sorry I am still outranking you for a few keywords.

[arikgub]

Did this raise a flag at Google? Was it 'clocked' and let go?

Or were they completely unaware?

No proof either way, but my own view is that they were ignorant they were being gamed.

.. and in my view they simply didn't care. I am not saying they are ignorant, they are simply not looking the big brands way until they have no choice. JCP, OS, BestBuy, Walmart ranking high - good for Google.

[Sgt_Kickaxe]

I have no pity for Overstock, they knowingly shoved pointless links in University materials and profited from it. In fact what they are making NOW is what they should have made all along so they really are crying wolf here. I don't see them paying back what they essentially stole from other businesses/webmasters who should have gotten the visitors prior to Google's action.

Overstock should be very appreciative that they were told of a penalty and have a clue when it will expire, not many are that fortunate.

[walkman]

looks like previous quarter revenue was higher than it should have been :)

“We now estimate that it will be at least another two to three weeks before Google will end the penalty period,”

You deserve a year with a bigger drop, it was greed not trying to make ends meet. I lost way more than 50% from Panda and did nothing

[ascensions]

How many companies have had similar loss in profits I wonder that we're not hearing about. Curious when those "numbers" start showing up in their ledgers, how horrific this web-genocide is going to be?

[tedster]

Once again the press is not reporting accurately when they write: "Six weeks after getting penalized by Google Inc. for using promotional links with university web sites..."

David Harry (he posts here under his widely used nickname "thegypsy") was closely involved with the original Wall Street Journal article as an independent third party consultant. He shared the following information here at the time:

Ok gang, once more... it was NOT all about the EDUs. I can confirm this, but I cannot give details as it was given to me <off the record>. And I can also confirm that the other item they were caught doing is most CERTAINLY in violation of the Google guidelines.

I was also confused somewhat as there was no 'smoking gun' with the EDU stuff. I've gotten clarification and most certainly ANY website would have been nuked if caught doing what they were. I wish I could tell you more, but I respect my sources.

[webmasterworld.com...]

[canuck]

Google had an opportunity to step up and give Overstock a significant penalty, and to send a message to large corporations that Google's rules apply to them too.

8 week penalty? Really?

[Planet13]

One important thing that people might be missing:

Overstock took a huge hit in organic traffic and ONLY lost 5% of their revenue! I dare to say that if the same thing happened to me, I would lose 95% of my revenue.

what does that tell us all about diversification of our revenue streams?

Since this is an SEO forum, I am not going to go into other areas of marketing, etc., However, I am starting to think that the "best" form of SEO is one that serves a dual purpose - i.e., generates traffic as well as page rank, or generates brand awareness along with "trust" or...

[Planet13]

...they are simply not looking the big brands way until they have no choice. JCP, OS, BestBuy, Walmart ranking high...

I think that google isn't saying something like, "these sites have big bucks so they get a pass."

I think that quite simply all the PR that these companies do generates a lot of trust among users, who then add comments and ratings to their product pages, makes them feel more comfortable about linking to their pages from their blogs or facebook pages, and in general just do things that google loves.

Plus, since many people in the SEO world say that social "mentions" (un-linked references to a company's name or web site) help in the SERPs, and these companies are ALWAYS in the news for some reason or another, that has to help, too.

[tedster]

Agreed. I also know of many very big brands that got a penalty with absolutely no public noise.

[buckworks]

starting to think that the "best" form of SEO is one that serves a dual purpose - i.e., generates traffic as well as page rank, or generates brand awareness along with "trust" or...

Yes. Yes. YES.

[brotherhood of LAN]

Overstock took a huge hit in organic traffic and ONLY lost 5% of their revenue! I dare to say that if the same thing happened to me, I would lose 95% of my revenue.

Remember that this is over a 6 week period, with 46 more weeks in the year they 'expect' revenue to be further hit.

Yet somehow they 'expect' their penalty to be lifted soon. They must be in constant discussion with Google to make such an assured statement.

[maximillianos]

Seriously. 8 weeks? And many of us Panda sufferers are approaching 8 weeks. I hope my penalty ends then.

What about all the links they gained during this era of tricking Google? I'm not talking about the edu links. I'm taking about links their pages acquired naturally due to the fact that they were ranking so well by cheating.

I think all discovered inbond links found during the last year should be nullified.

[Planet13]

Yet somehow they 'expect' their penalty to be lifted soon. They must be in constant discussion with Google to make such an assured statement.

Or maybe they have had experience with a similar penalty in the past and they are just basing their opinion on past experiences?

Or maybe SOME of their pages have escaped from the penalty, and they think the rest will soon follow?

Or maybe they are just talking out their behinds. Their executives keep asking their SEO people when they are going to start generating more revenue, and the SEO people, in an attempt to CYA, blurt out, "two to three months." Then the PR people at overstock tell their executives to say "soon," so that becomes the official word.

I think too many jobs would be at stake if internally, people would say, "we could be penalized for a year." How would the board of directors feel about that? (I am assuming OS is a public company, but I apologize if I am wrong.)

[arikgub]

I think that google isn't saying something like, "these sites have big bucks so they get a pass."

No. But may be they are saying "BestBuy ranking high for the electronics related keywords is a good user experience, and who cares how BestBuy gets there"?

And me, having a hard time competing with BestBuy in the organic search - I hate to admit it but if BestBuy is not on the first page for the "televisions" query - that's a poor user experience, whether they follow the G guidelines or not.

[arikgub]

Overstock took a huge hit in organic traffic and ONLY lost 5% of their revenue! I dare to say that if the same thing happened to me, I would lose 95% of my revenue.

what does that tell us all about diversification of our revenue streams?

Revenue figures do not tell what the real impact of the penalty is. May be they stepped up their advertising campaigns to compensate for the drop in organic traffic?

They are public company and have a very clear interest to show their shareholders that their dependence on Google whims is minimal. I don't believe one bit what Overstock is telling/selling.

[Planet13]

I hate to admit it but if BestBuy is not on the first page for the "televisions" query - that's a poor user experience, whether they follow the G guidelines or not.

I think that is a key statement.

I think that if the user experience is good enough - in essence, the quality is high enough - then your rankings will be less affected when you go against some of the terms of service. Best buy has nice comparison tools, lots of ratings and reviews, a BIG selection of products, and name brand recognition.

I am sure that a lot of the news about best buy, like their earnings reports, get picked up by news outlets and republished numerous times. When they make a significant hiring, that press release gets picked and republished as well. They probably have numerous listings in jobs classifieds. They sponsor lots of events that probably give them a straight href link. They have a huge social media presence.

I am sure all that helps.

they probably get mentioned by high profile environmental groups for being ecologically irresponsible. They probably get listed by manufactures' sites when there are product recalls. Probably lots of ex-employees hated working there and in their blogs say as much.

I think these things probably HELP their rankings, too.

So I just don't think it is as simple as google saying "this company gets a pass because they are so big."

Anyway, these are just my thoughts.

[nomis5]

Realistically a meagre 5% drop could be because of a whole pile of factors. To say that small drop is due to this or that is just imagination gone mad.

A 5% drop is well with the bounds of normal fluctuations. Trying to work out what caused it is a waste of time. Overstock are just going for a publicity stunt.

I look at my stats each day and a 5% drop wouldn't even register as a problem. A 40%+ drop over a few weeks and I'd start looking around for what caused it.

[crobb305]

We now estimate that it will be at least another two to three weeks before Google will end the penalty period

Where are they getting this information?

[tedster]

Overstock are just going for a publicity stunt.

Saying "just a stunt" may be a bit harsh, but this certainly is all about publicity and public perception. And I'm sure they did lose some revenue from their website, too.

The press (NYT, CNN, WSJ) is now involved in a publicity effort around Google's power, and they're using various sites as pieces on the game board. Overstock is one of those pieces and they are communicating to the general public and their stockholders by releasing information like this.

Let's not be naive - there's a LOT of money on the search table and where there's money, there are sophisticated and heavily nuanced power games.

[edited by: tedster at 8:33 pm (utc) on Apr 9, 2011]

[walkman]

Planet13, maybe just 5% because they are advertising more.

>>> "No. But may be they are saying "BestBuy ranking high for the electronics related keywords is a good user experience, and who cares how BestBuy gets there"? "

I have exactly what I say I have on the website. So should I do the same?

[marketingmagic]

Ok gang, once more... it was NOT all about the EDUs. I can confirm this, but I cannot give details as it was given to me <off the record>. And I can also confirm that the other item they were caught doing is most CERTAINLY in violation of the Google guidelines.

I was also confused somewhat as there was no 'smoking gun' with the EDU stuff. I've gotten clarification and most certainly ANY website would have been nuked if caught doing what they were. I wish I could tell you more, but I respect my sources.

[webmasterworld.com...]

I knew it couldn't have been because of the Uni links - those are legit non-paid links and if Google was/is going to start banning businesses over how they choose to market themselves online, it would only be a matter of time before one of the banned companies decided to sue them over it - and if there was any doubt as to who bought the links, Google will lose.

Google needs to be very careful with these manual penalties and make sure that they are only penalizing for what would be very obvious link buying - anything less and they are crossing the line.

I know they want to put the fear of god into us all with respect to paid links - but they better tread carefully.

As for big brands being on the first page contributing to a positive user experience - I think that's BS.

If BB or any other brand doesn't have unique content, or has a poorly optimized site - dup content scraped from manufacturers, etc... then why should they be on the first page for tvs or any other term?

They have to earn it like the rest of us by providing unique content that users want. And for the record there are plenty of consumer electronic terms that BB doesn't rank well for.

Just my 2 cents.

[weeks]

Overstock's overall management style appears to be to play along the edges of what is proper. To get the big picture on this company view of moving about in the world. Barry Ritholtz used the phrase "fraud" to describe their way of working.
[ritholtz.com...]

[Edge]

I think that google isn't saying something like, "these sites have big bucks so they get a pass."

And how many folks have been notified by Google that they where getting or going to be penalized? --

On Feb. 22, Google notified Overstock that it was penalizing the company for noncompliance with some of Google's search guidelines.

The playing field does not seem level to me..

[GuyFromKlingon]

This is not fair criticism of the great Google.

We all know that if Google buys your company, your penalty is lifted.

So it is fair. You get bought by Google, penalty is lift. Otherwise if you are not giving Google money, you are penalized.

This is fair system. I like it.

[tedster]

Gee, GuyFromKlingon, things must be very different on your planet's version of Google.

Here on earth we have a lot of businesses crying that they pay millions of dollars to Google for Adwords and they still get hit by penalties and lose traffic.

[CainIV]

This is getting ridiculous. A multi-billion dollar company leveraging its capital, scale and domain authority to dominate search and bully small businesses, is experiencing a setback in revenue as a result of objective and honest scrutiny and we need to apologize.

Agree 110% here.

[arikgub]

If BB or any other brand doesn't have unique content, or has a poorly optimized site - dup content scraped from manufacturers, etc... then why should they be on the first page for tvs or any other term?

I sort of understand you, but I believe that as long as a keyword falls into the "e-commerce" vocabulary, content doesn't matter that much. The Brand, on the other hand, does. And why should they be on the first page? Because people are looking for them specifically. Google is incompetent if they are not there.

And let's be honest, when it comes to product pages, a customer couldn't care less if the product description is dup or not. Does rewriting a product description in a "unique" way add any value? Really? There are use cases where dup content shouldn't be a factor.