Paid-Link Penalty

Yesterday online travel giant Expedia announced Q4 2013 and full year results. The company “beat the street,” reporting strong room night and revenue growth across all geographies.

So far a suspected penalty from Google hasn’t hurt the company’s bottom line. See our earlier stories:

• Expedia Lost 25% Of Their Search Visibility In Google Possibly Over Unnatural Links
• Expedia & Google: No Comment From Both About Possible Expedia Penalty

Last month the site took what appears to be a major traffic hit, losing as much as 25 percent of its organic search traffic. Many believe this was because Google penalized the site afterdiscovery of a paid link scheme.

Google and Expedia have repeatedly and pointedly not commented on the issue. However there’s substantial evidence that Expedia was participating in a paid-link scheme.

During the Expedia earnings call yesterday CEO Dara Khosrowshahi was asked about the suspected penalty by a JP Morgan Chase analyst:

Douglas Anmuth – JP Morgan Chase & Co, Research Division I just wanted to ask 2 things. There have been some recent reports [indiscernible] some national search visibility on Google. I was just hoping that you could comment on that . . .

Dara Khosrowshahi – Chief Executive Officer, President, Director and Member of Executive Committee Yes, as far as Google goes, look, listen, we’re not going to comment on speculative articles about our Google trends. What I’ll tell you in general is that our traffic from Google, both on a paid and an organic basis, continues to increase on a year-on-year basis. We look at all of our practices in Google, our SEM practices. We make sure that the content on from our side is great, our SEO practices, et cetera, and we’re constantly auditing them and making sure that our practices are industry-leading. So really, that’s the only comment I’ll make. Google’s a big partner. We continue to grow with them. And from a long-term basis, we look to continue to grow with them going forward.

That’s a very bland non-answer. One might call it “evasive” even.

Expedia gets a significant portion of its bookings through search traffic. Indeed, Expedia is highly sensitive to its dependence on Google. Not just a “big partner,” Expedia sees Mountain View as a potentially formidable competitor in travel. The company is part of the anti-Google lobbying group FairSearch.org that has complained loudly about Google “favoring its own content” vs. third parties in organic results.

The following is a discussion citing Expedia’s Martin MacDonald from a Linkdex report called “Travel 360″:

Certainly from an Expedia affiliate perspective, we know that for above 50% of all of the bookings that we receive, the consumer’s journey starts at Google. When you consider that is likely also to be true for other segments of the market such as meta search, or direct bookings, we can reasonably state that Google already have something of a monopoly in Europe.

The impact of any penalty resulting in a 25 percent loss (or more) of organic traffic should manifest at some point in Expedia booking and revenue losses. So far that hasn’t happened.

Expedia is a company with many brands and diversified sources of traffic. It may be able to “compensate” for the suspected penalty by buying more SEM or through its subsidiary sites and affiliates. 

Source: http://searchengineland.com/suspected-paid-link-penalty-hasnt-hit-expedia-bottom-line-yet-183714