Expedia stock drops as site falls in Google's search results
The power of Google's core search business was on display Tuesday when it demoted the travel site in its search results. Paid links to Expedia may have triggered the penalty.
Investors fretting about Expedia's prospects sent its stock down 4 percent Tuesday after Google lowered the travel site's ranking in its search results.
Google draws attention these days for projects like self-driving cars, smartphone operating systems, and super-fast broadband, but its search business still has tremendous power over what happens on the Internet. Expedia's stock initially dropped much more, but recovered some of its losses to close at $67.67, a $3.02 drop.
The damage was caused by a precipitous decline in Expedia's rank in search results on Google. Companies can bid for search ads that show when people search for terms like "cheap flights Miami," but they can also get a lot of business by unpaid "organic" search results.
The search engine optimization (SEO) industry has grown up around trying to help clients rank highly in searches, but Google often penalizes SEO techniques it considers to be gaming its system. That punishment typically takes the form of an algorithm adjustment that detects what Google considers to be a particular type of shenanigan and then it demotes the sites that use that technique.
What exactly got Expedia in trouble? Neither it nor Google would comment, but evidence of Expedia-related SEO transgressions emerged in December in a blog post by a SEO firm, Nenad -- specifically, the use of paid links.
Google assesses the importance of a particular Web page in part based on which other Web pages publish links to it. Paying a publisher to include links to the Web page long has been a no-no in Google's rules, but Nenad spotlighted blog posts where terms like "car rental," "United Airlines," and "guaranteed best price on airfare" pointed to relevant parts of Expedia's site.
It's not clear who, if anybody, was responsible for the paid links; the SEO industry is ripe with many contractors, and plenty of their work is above board.
Google long has maintained that publishing good content is the best way to get Web sites to rank high in its results:
The best way to get other sites to create high-quality, relevant links to yours is to create unique, relevant content that can naturally gain popularity in the Internet community. Creating good content pays off: Links are usually editorial votes given by choice, and the more useful content you have, the greater the chances someone else will find that content valuable to their readers and link to it.