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Summary:

Google’s latest algorithm changes appear to be aimed directly at “content farms” such as Demand Media. Although the newly-public content company maintains that it won’t be affected by the changes, it seems obvious that Google is upping the ante in the content-farming game.

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Just before so-called “content farm” Demand Media went public in January at a $1.5-billion valuation, Google said that it was planning to make some changes to its search algorithms to clamp down on the profusion of low-quality results from content farms. Last night, the search giant finally rolled out those changes, and they appear to be a dagger aimed directly at the heart of companies such as Demand, whose stock tumbled on the news. The content company maintains that it won’t be affected by the new algorithm, but it seems clear that Google is upping the ante in the content-farming game.

Google hasn’t specifically said that the changes are aimed at content farmers — in fact, the term doesn’t appear anywhere in its blog post, which simply refers to “low-quality sites” — but Search Engine Land says the rollout is almost certainly aimed in that direction. According to Google, the changes affect about 12 percent of the company’s search results, which is a fairly large proportion for such a change, and an earlier revision last month targeted so-called “scraper” sites, which simply copy content verbatim from other sites. Google’s statement in January said that action would be taken against both scrapers and content farms, so by the process of elimination this algorithm change seems likely to be directed at content farmers.

So why is Google being so coy and not calling these changes an attack on content farms? Perhaps because the whole term “content farm” is problematic — not just in the sense that it is difficult to define, but problematic for Google, since sites like Demand Media run a lot of Google advertising (although the company says this plays no part in whether it cracks down on their results). GigaOM Pro analyst David Card and I looked at the content-farm industry in a recent research note called Content Farms: The Players, the Benefits and the Risks (sub req’d), including the challenges of dealing with Google, and I also discussed the need for Google to take action against content farms in a related paper (sub req’d).

Demand Media — which is adamantly opposed to the term “content farm” — maintains that its content is high quality enough to escape Google’s crackdown. After the search giant announced the coming changes in January, founder and CEO Richard Rosenblatt said that Google’s comments “were not directed at us in any way.” And on the Demand Media blog, it responded to the latest changes by saying that:

As might be expected, a content library as diverse as ours saw some content go up and some go down in Google search results… It’s impossible to speculate how these or any changes made by Google impact any online business in the long term – but at this point in time, we haven’t seen a material net impact on our Content & Media business.

When it comes to the latest changes and their effect on content, the stakes are high for all content-production companies — including Yahoo’s Contributor Network (formerly called Associated Content, which was acquired by Yahoo last year) and other sites such as Suite101 — but they are arguably highest for Demand, which went public based in large part on the value of the content created for its eHow platform and related sites. Among the risks it detailed in the “risk factors” section of its securities filings prior to the IPO was the possibility that Google could make changes to the way it handles and ranks content, and that this could negatively impact the success of eHow.

Now, investors will no doubt be paying close attention to the effect of Google’s changes — and they seem to already be skeptical about Demand’s insistence that this won’t change anything, since the stock dropped by more than 5 percent after the Google news.

Related GigaOM Pro content (sub req’d):

Post and thumbnail courtesy of Flickr user Armchair Aviator

  1. Actually, when you tighten the screws on Brer Rabbit, you actually tighten the screws on yourself. Read your fables and avoid destroying your search engine ad revenue stream.

    http://tradewithdave.com/?p=5482

    Dave Harrison
    tradewithdave.com

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  2. What’s a content farm?

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  3. There goes Google’s revenue stream! Our company is not a content farm but a travel guide we’ve seen a 40% drop and we use Adsense to generate revenue. That means less rev to G as well.

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    1. Google’s revenue stream will not be effected. While your rank dropped someone else’s went up. So, basically the players are being moved around. While one player looses another gains. But the team’s owners (Google) continue to benefit.

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  4. Santhosh Cheeniyil Friday, February 25, 2011

    Finally! The amount of spam in search results was beginning to get annoying!

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  5. Mathew, it looks like Demand Media is actually in positive territory at the moment, by close to 3% … which, by your definition of “tumbling”, means it’s now soaring :)

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  6. Its seems google in acting in a desperate manner. This is a crucial time for it. It is facing stiff competition from facebook and bing. It should improve itself. But it should also remember not to loose user loyalty.

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  7. [...] including Pluck. While Demand says that it has not yet been affected by Google’s crackdown on content farms, the acquisition could be a sign that the company wants to expand into other areas of [...]

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  8. [...] but that they’re actually aimed at content farms, too. And GigaOM’s Mathew Ingram talked about why Google may be reluctant to publicly target content farms — because they run a lot of Google [...]

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  9. [...] As mentioned, ‘Wired’ has an excellent article about content farming. Giga OM is following the content farming debate from the start. Two good posts are “The benefits and risks of content farms” and “Google Tightens the Screws on Content Farms” [...]

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  10. [...] first content-farm related algorithm update in February (known as the “Panda” update, the nickname of one of the engineers involved in [...]

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