Demand Media, which is behind sites like eHow.com, says it isn’t as much as some have suggested.
On Monday, Demand Media released a statement saying saying predictions of 66% traffic declines at eHow, its flagship site, are “significantly overstated.” In fact, the company said, it expects its sites to see traffic growth this quarter that is the same as or greater than the growth at this time last year.
Google began cracking down on so-called content farms earlier this year, saying that it was going to adjust the mathematical formula behind its search engine to downgrade sites with “low-quality” material. Google says the sites it’s targeting have little value or content copied from other websites but make pages that appear high in search rankings so that people will visit the sites and see ads.
The first changes began rolling out in February, and Google said they affected 12% of search queries. But they didn’t really hit eHow at the time. On April 11 , though, Google put out a new update to its changes — code-named Panda — that affected an additional 2% of queries, apparently including those involving eHow.
The changes at Google are a big question for Demand Media, which went public in January and relies on search for a significant chunk of its traffic. Demand Media doesn’t usually comment on such changes by search engines because they “can happen nearly daily,” said Larry Fitzgibbon, the company’s executive vice president of media and operations.
But overall, it’s clear that Demand Media is dependent on Google in a number of ways. And “minimizing that risk takes time,” says Stifel Nicolaus analyst Jordan Rohan. “Demand has not had sufficient time to diversify away from those risks,” he wrote in a note Monday.
And it seems that Wall Street was spooked despite Demand Media’s efforts at reassurance. Amid a broader market selloff, the company’s shares were off more than 9% in morning trading.
Source http://blogs.wsj.com/
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