Last week, online-coupon and sale-offer website RetailMeNot (SALE) saw its shares sink 19% in one day. The prompt for the plunge? Digital marketing data provider Searchmetrics reported RetailMeNot’s visibility within Google’s new search algorithm was 30% weaker than it was before the search engine’s overhaul.
If it were the first time Google (GOOG) had up-ended a company’s place in the search engine giant’s web-query results, it may by dismissible as just a little bad luck; the fact that Google also happens to compete with the up-ended organization could be chalked up as coincidence.
But RetailMeNot isn’t the first e-commerce site to suffer a sudden and unexpected setback in its Google search results. Likewse, SALE stock owners aren’t the only investors who have paid the price when GOOG decided it was time to shake things up in an arena where it just happens to be working (albeit indirectly) to strengthen its presence.
Just for the sake of discussion, is it at least possible RetailMeNot is another victim, not just of circumstance, but of Google’s willingness and ability to put its own interests first?
Google routinely changes where — and how — websites appear in its search results. While the world’s largest search engine never says precisely why it revamps the way its search queries work, it’s not difficult to assume it largely does so to both improve the relevancy of its search results and weed out the lower-quality and lower-relevancy sites from its query results. For whatever reason, RetailMeNot was deemed to be not-quite-as-relevant under the new GOOG algorithm.
Considering Google owns two-thirds of the U.S. search engine market share, it’s no small setback for RetailMeNot or for SALE shareholders.
Perhaps even more concerning is that Google just so happens to make good money by selling ad space for terms like “coupons” and “discount offers” … terms that would presumably be used by someone looking for a site like RetailMeNot. With the site now even further away from the search engine’s top results for coupon-seekers, Google is arguably in a position to benefit from the competing site’s stumble.
Perhaps worst of all, this isn’t the first time, or even the second time, Google has somehow managed to trip up its competition.
Google Strikes Again
If the whole shebang seems vaguely familiar, it may be because Google put online travel-booking site Expedia (EXPE) in the proverbial penalty box in January. That is, Google punitively — although only temporarily — shoved Expedia out of the search engine’s top “travel” results.
Though GOOG rarely explains why things happen with its search engine, it’s widely accepted that the web search giant didn’t care for the “unnatural” links (web spam) it was seeing from Expedia around that time.