• by Shankar Gupta , February 22, 2005

Rumors are flying on search engine-related message boards, forums, and Web sites that Google had done its first major algorithm change of the new year--sending some companies' natural rankings up, and wiping others out almost completely.

Google would neither confirm nor deny that there was a major algorithm update, but a company spokesperson said that Google is constantly updating its algorithm to improve service.

Industry professionals, however, had little doubt that the algorithm is changing. "There's some buzz going back several weeks," said Peter Hershberg, a managing partner for New York-based search engine marketing firm Reprise Media. "Several companies have indicated that their rankings have either gotten better or worse."

According to Hershberg, the update appears to be focused on distinguishing between the quality of different links, which the algorithm generally tabulates to determine order in the organic rankings. "It would appear as though Google is making distinction of quality of links. All links are not equal, and they're giving some links more credence than others," he said. "Lots of attention is being given to site content and anchor text." Anchor text refers to the hyperlinked text that directs a user to the linked URL.

He said that the new formula appears to give more weight to sites that have content, not just sponsored links and a navigation bar. And Google apparently now evaluates the anchor text to determine if it's related to the site content, or is just the same word over and over again--in which case the site's rank would fall.

These algorithm shifts can seriously affect the business prospects of a company that relies heavily on search engine traffic for its business. "A site could be impacted pretty significantly," said Hershberg. "If, for whatever reason, their rankings are affected, it could have a dramatic impact on their business." Companies can avoid having their ratings take a big hit during these larger algorithm changes, which tend to come a few months apart, Hershberg said, by diversifying the way in which their sites are optimized for search engines.

Smarter firms are "not necessarily optimizing their sites the same way from top to bottom," Hershberg said. "When there are updates of this kind, if your site is penalized, it could wipe out all of your rankings," he said, adding: "If your site is set up in different ways, and this kind of update comes, your site is not going to be as impacted as it might have been otherwise."

Hershberg said that his own firm, Reprise Media, hasn't yet begun to change its strategies in response to the update. "We try not to react to updates until we fully understand how to deal with them," he said.