Looks like Penguin was a success for shareholders

[timwilliams]

Google's earnings report for q2 was just released and it appears to be a pretty good indication of penguin's success. Forecast: more penguin...

Revenue came in at 9.61 billion, 1.2 billion higher than estimates, and 42% more revenue from paid clicks than q2 2011.

I think that the writing is on the wall for commercial sites in the serps.

[SnowMan68]

I think that the writing is on the wall for commercial sites in the serps.

I don't know if the writing is quite on the wall. IMO search is getting to be a lot more competitive, as with anything else. In the past you could get away with a lot. That's no longer the case.

[netmeg]

I very much doubt that most "commercial" sites got hit.

[timwilliams]

IMO search is getting to be a lot more competitive

Yes, especially when you factor in the competition from google. If I were google, or any business for that matter, I would be doing everything I could legally do to maximize revenue and profit. If I were google I would do what I could to suppress commercial sites in the organic results in favor of my paying customers. What better way to suppress commercial sites than penalizing, I'm sorry, manual action-ing them for unnatural links. Who's more likely to have an unnatural inbound link footprint, a commercial site or an informational site? It's just business.

[timwilliams]

I don't think I said "most" commercial sites got hit Netmeg.

[Whitey]

Googlers say there is no connect between advertising and the algo. I believe this.

But the profit growth comes from somewhere. The SERPS themselves are squeezed with Google assets engaged on results pages. Maybe the search quality and spam teams are not directly part of the squeeze, but the google team controlling page layout must be connected to the financial performance of the SERPS.

And Google will continue , according to it's financial planning to grow that.

[Sand]

the google team controlling page layout must be connected to the financial performance of the SERPS.

And we have a winner.

I'm sure they take other metrics into account as well, but 'our users are 2% unhappier' loses out to 'we made 10% more money.'

[timwilliams]

Googlers say there is no connect between advertising and the algo.

I think that's always been said in response to whether or not advertisers got preferential treatment in the serps. I would agree with that.

What I see going on is the systematic numbing down of the serps, google slowly and methodically training searchers to disregard the serps in favor of adwords, local, shoping, knowledge graph... the move from organizing the worlds information to providing the worlds information... or not, who knows.

[claaarky]

I think Google's aim is to only allow top quality sites (sites most people like) to prosper in the organic AND paid results, because they know that presenting quality sites produces a better experience overall for their users, and that will encourage long term loyalty. Panda and Penguin are the means to that end - encourage people to up their game or call it a day.

Wasn't most of the increased profits announced due to the Motorola acquisition? This is a signal to where Google is going - it's not all about Adwords. They are an advertising company ultimately, and I think they plan to dominate all forms of advertising.

[BeeDeeDubbleU]

Googlers say there is no connect between advertising and the algo. I believe this.

The algo is constantly being altered to prevent people from using Google for free advertising. That is surely one connect?

What I see going on is the systematic numbing down of the serps, google slowly and methodically training searchers to disregard the serps in favor of adwords, local, shoping, knowledge graph... the move from organizing the worlds information to providing the worlds information... or not, who knows.

This is more like the truth as I see it. Think about it. If you were running google for the shareholders would this not be on your agenda?

[claaarky]

If I were Google I'd be giving people a positive incentive to use Adwords, by rewarding quality sites with improved organic rankings (for the terms that perform well in Adwords).

Google organic search would be mad to ignore the various signals that Adwords sends about your site (keywords you think are important, what converts for you, etc.) especially as there can be no more trusted source of information.

I only see Google attacking low quality sites, regardless of whether they are commercial or not - it's just after quality sites in its' results. That produces greater user satisfaction, pushes up usage, which in turn produces more ad impressions and clicks.

I know from personal experience as a Panda sufferer that there is a connection between organic and Adwords. When Panda hit, my Adwords quality scores dropped like a stone (but not all, just the areas of my site affected by Panda). My first move was to increase my Adwords spend to get my impressions back up, but it was much more expensive and ultimately unsustainable, so I closed down all my low quality ads. So Google users were successfully protected from the Panda hit (low quality) sections of my site.

I think Google has a very long term view and is actually prepared to take a short term hit on Adwords revenue for a better long term outcome.

[timwilliams]

Wasn't most of the increased profits announced due to the Motorola acquisition?

prepared to take a short term hit on Adwords revenue

42% more revenue from paid clicks than q2 2011, yeah I'd be prepared to take those kind of hits all day long.

[claaarky]

Panda was released in Q1 and Q2 2011.

[timwilliams]

Panda was released in Q1 and Q2 2011.

That's great, I'm talking about penguin, as the title of the post hints to.

[davedm]

This money isn't coming from nowhere. Google is bleeding publishers and commercial sites dry.

[backdraft7]

Not sure how Google is cooking up these numbers. If you look at their stock price in March, it was $650/share, by June it had dropped $100/share to $550. So, riddle me this, how do you show a profit of 2.8 billion when your stock drops $100/share? [marketwatch.com...]

I think this is related more to the newly acquired Motorola business and does not in any way reflect search satisfaction. And besides, Lord Larry needs to look good ya know!

[claaarky]

I just don't believe that Google punishes webmasters in the organic results in order to force them to use Adwords. It's just not a long term strategy. Neither is bleeding people dry. Google are far, far smarter than that. Even parasites know they have to keep their prey alive!

Penguin, Panda, ATF, etc. are all here to teach people to stop wasting time and money on certain activities and focus on doing the right things. Nothing to do with Adwords - I'm 100% confident about that (except from the point of view of improving results and encouraging more use of search, which would produce more clicks on Adwords).

[timwilliams]

Backdraft7, I'm not taking the Motorola purchase into account, only rev from ppc during the second quarter, the quarter of penguin and the ppc revenue was up 42% y/y q2 2011 to q2 2012

[backdraft7]

@tim - in the wide scope of thing, yes, they are up over last year, but if we focus on the period of March to June of THIS year, it tells another story, especially if this is being slanted toward search satisfaction. The increase over last year seems to be Panda related and a squeeze on advertisers, while the price drop from March to June seems to be Penguin related and an indication of poor user satisfaction. Just my observation.

[netmeg]

Google is bleeding publishers and commercial sites dry.

I'm not sure that's true. All we hear about here are the ones who aren't doing as well. My EPC this year is three times what it's been in any year prior, since AdSense opened its doors. My CTR is way down, but the EPC is through the roof.

[timwilliams]

Backdraft7, I'm not going to pretend to know what makes the stock do what it does, I gave up that game long ago. My prediction shortly after penguin was launched was that it would increase google's revenue from adwords. The outcome: google's revenue from adwords increased following the release of penguin. I think the reason for this is two fold, first commercial websites (like myself) that got manually actioned by penguin likely resorted to paying for traffic via adwords (like we did), and second more searchers clicked on adwords ads after not finding suitable site in the organic results.

[chrisv1963]

I'm not sure that's true. All we hear about here are the ones who aren't doing as well.

My business is doing better than ever before since Penguin. Thus ... I'm one of those that isn't complaining.

[tedster]

I just don't believe that Google punishes webmasters in the organic results in order to force them to use Adwords. It's just not a long term strategy.

And it isn't Google's strategy either. For every business that loses organic traffic, another one gains it. I know of several that recently dropped Adwords because their organic traffic is now very strong.

[timwilliams]

For every business that loses organic traffic, another one gains it

Not exactly, for every website that loses organic traffic, another one gains it. For two niches that I am in there are no longer any commercial websites on the first page in the organic results, only informational websites that are not monetized with the exception of a couple of sites that have adsense.

[Zivush]

Let's suppose it is a zero sum game and Panda/Penguin favors quality sites while biting the bad ones.
Now users are happy.

Who clicks on Google ads anyway? A satisfied user or the frustrated one? That's a tricky question.

My theory:
1. I think Google tried hard lately to shift traffic from 'high commercial keywords' to click on Adsense and because of that, Adsense on these type of searches is dominating the search result (above the fold).

2. For 'information related keywords', Google wants to give the best results showing quality info sites above the fold, making these users satisfied as soon as possible so that they get transformed to a "buy mode" and start searching for 'commercial keywords' (point 1.).

The idea is simple - If these users won't get the info they want, they wouldn't buy and thus convert (click on an a high $$ ad) ever.

[BeeDeeDubbleU]

And it isn't Google's strategy either. For every business that loses organic traffic, another one gains it. I know of several that recently dropped Adwords because their organic traffic is now very strong.

I would be very surprised if bottom line implications were not considered in every decision that is taken at Google with regard to the results that they display. Algo changes have the potential to damage bottom line so the consequences of these changes will be carefully considered before they are made.

[claaarky]

I think google see that as they improve their users' experience, engagement improves and so do their revenues. They are focusing on user experience by improving the algo, so in effect they do indeed always have their minds on the bottom line. It's what they are encouraging us to do as well. If we improve our sites it's good for us but it's also good for them.

[BeeDeeDubbleU]

I think google see that as they improve their users' experience, engagement improves and so do their revenues.

Personally I see no improvement in user experience at Google. AFAIAC the results are no better now than they were a year ago.

I stopped using google as my default search engine about a year ago. I now use Bing, which also has its limitations. My practice has been to use Bing as default and then revert to Google when I cannot find what I am looking for. Recently I have noticed that reverting to Google is not always the answer. In many cases Bing's results are better.

I was searching for something in Google yesterday and more than half of the results for a search were from the same website. It is now their policy to provide multiple results from the same website in lots of searches. That is just one example and hardly an improvement.

[claaarky]

What's Google's market share of search now? 70, 80, 90%?

I'd say that's a fairly good indication of what the majority of the world think of their experience of using Google, whatever we may think of individual search results.

Regarding multiple results from one site, I'd say that's an indication that all those pages are a better quality + relevancy combination than anything below them. When I see this for my personal searches I find it saves me time navigating through the site which clearly is most relevant to my query - I can scan Google's results and go straight there.

It's annoying for me as a webmaster, seeing my site shoved down by numerous pages from the better sites above me, but it makes sense to me as a user and it helps me achieve my goal quicker.

[timwilliams]

It's really not right to talk about panda and penguin together. panda attempts to determine website quality based on factors on the subject website. penguin punishes based on factors not directly related to, or under the control of the subject site in spite of the quality of the subject site.

So the question is: is google using penguin to a. make the world a better place by curbing linkbuilding. b. increase the revenue of a major corporation consumed by the need to show growth every quarter.

It would be nice to know what the kids have to say about it, but Larry's not talking much these days and I can't remember the last time I heard from Sergey. I used to believe in google, you knew that Larry and Sergey believed in what they were doing and saying, they just wanted to build a search engine. Now it's a monster, a machine and I think it's out of their control and I think it's making them sick what it's become.