Sunday, 20 July 2014

Google Penalty Costs eBay Big Time

Back in May, when Google launched a new version of the Panda update, some quickly noticed that eBay seemed to be taking a hit in the rankings. It turned out that it was apparently at the hands of a manual penalty rather than Panda.

The penalty was related to weird category pages that eBay users were unlikely to actually land upon navigating the site, making one (Google alike) wonder why they even existed.

This week, eBay reported its quarterly earnings with a 13% increase in revenue. That could have been higher if it wasn’t for the Google penalty. Danny Sullivan at Search Engine Land points to some comments made by eBay CFO Bob Swan during the company’s earnings call:

Marketplaces delivered $2.2 billion in revenue, which grew 6%, GMV grew 8%, and operating margin declined 340 basis points. It was a challenging quarter. As John indicated, we got off to a good start, but we had significant obstacles late May.

The combination of the cyberattack and the Google SEO had an immediate and dramatic impact on GMV growth. June GMV growth was 7% driven by slower active buyer growth and lower conversion. In light of these events, we have made significant investments to get eBay users reengaged, including couponing, seller incentives and increased marketing spend . . .

He later indicated the “SEO changes” could take a while and “cost more” to recover from. The company reduced its full year revenue guidance by $200 million. Swan also blamed the cybersecurity/password reset debacle for some of the trouble, but clearly the SEO issues are the biggest problem for the company currently.

You can find the transcript of the call at Seeking Alpha.

It goes to show that not even the big boys are immune to the wrath of Google.


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