• by Tameka Kee , August 3, 2007

Traffic to Answers.com is down some 28%, according to a statement released by the site's parent company, Answers Corp. The company attributed the overall slowdown to a drop in search engine traffic--and linked it directly to changes in Google's search algorithm.

With almost 3 million average weekly unique visitors in June (according to comScore), that represents a loss of more than 830,000 eyeballs. "We are working diligently to analyze and address the recent algorithm change," said Bob Rosenschein, CEO, Answers.com.

The Answers.com predicament highlights the struggle many Web properties face because of their dependence on Google for traffic, and consequently, revenue. While bloggers and insiders at sites like Webmasterworld.com and WebProNews mulled over the topic, a recent eBay "marketing experiment" showed that even large companies are concerned about their Google-dependence.

In mid-June, eBay pulled all its dollars from Google's AdWords program for 10 days, aiming to see how much of a hit its paid search traffic would take. According to spokesperson Hani Durzy, the test was successful, and eBay learned that "we are not as dependent on Google AdWords as some may have thought."

Still, not all Web properties can afford a reduction in paid or organic search traffic--especially sites with ads as the primary revenue stream--and according to Rosenschein, that's one of the factors contributing to Answers Corp's imminent purchase of Lexico Publishing Group, owner of the popular Web properties Dictionary.com, Thesaurus.com and Reference.com. Two weeks ago, Answers Corp announced its intention to acquire Lexico for $100 million in cash.

"The major search engines modify their algorithms all the time," said Rosenschein. "This change only demonstrates the sound business rationale behind our agreement to purchase Dictionary.com, because it underscores a primary motivation for the deal: to secure a steady source of direct traffic and mitigate our current dependence on search engine algorithms."

Added Mr. Rosenschein: "On a pro forma basis, we expect at least 70% of our total traffic to come from people navigating directly to our Web properties or typing the term 'dictionary' in a search engine."

Analysts are predicting that Rosenschein and other top-level executives will face hard questions about the proposed acquisition and the financial effects of the dip in site traffic during Answer Corp's second-quarter earnings call on August 13.

Google, of course, was unfazed by the Answers.com announcement.

"We're always working to improve search--making it more relevant, more comprehensive, and faster," noted a spokesperson. "Many of the changes we make, including regular updates to our algorithms, are focused on improving the experience for users."