Whether you're a start-up, family-owned, or publicly traded, there's danger in letting your business rely too heavily on Google search for site traffic.
For 17 years, Linda Stradley has been posting recipes and cooking advice online to legions of followers, drawing enough traffic and Web advertising to support her and her husband, who are both retired. Type "how to cook a prime rib" into Google's search engine, and Stradley's site—whatscookingamerica.net—is among the top results.
One morning in May, Stradley woke up to find her business in crisis. The number of visitors to the site, which had reached around 5 million a month, was suddenly down by 44 percent, cutting ad earnings by 56 percent.
The plunge followed an update to Google's search algorithm, this one named Panda 4.0. Google periodically, and without notice, upgrades its service to push spammy websites and content farms lower down in search results.The goal is to create a better Internet, where users are more likely to find the best and most relevant websites based on their search terms. Google said the latest algorithm change, announced in a tweet from the head of its webspam team on May 20, would affect about 7.5 percent of English queries that are noticeable to users.
While the updates are targeted at bad actors, for people like Stradley, who aren't trying to game the system, they can be devastating. At 72, Stradley works at least eight hours a day and relies on the income from her website and its more than 3,000 pages. In trying to rebuild her position on Google, she's working with a software consulting firm to migrate her ancient program to WordPress and improve her search engine optimization (SEO). She says the costs will be in the tens of thousands of dollars.
"I've never seen anything like this and I had no idea it was going to happen," said Stradley, who lives in central Oregon. "I've worked very hard on this and put in lots of hours. It's not just a toy."
Stradley, who started working with the consulting firm even before the Panda update, relies heavily on Google because Internet search is such a popular way to find recipes and cooking instructions.She competes with much bigger sites like Allrecipes.com and Food Network.
Whether in food, travel, personal finance or e-commerce, any website that needs to be discovered needs Google. The company controls 68 percent of the U.S. search market, according to ComScore, and reeled in more than $50 billion in advertising sales last year. Sites like whatscookingamerica.net use Google's ad-serving technology and share revenue with the search engine.
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"We're always working to improve Google so search results are higher quality and more relevant," Jason Freidenfelds, a company spokesman, said in an e-mail. "We carefully consider and test every update we make, and the goal is always to improve search results for you." The company made over 890 improvements last year, he said.
The Internet is too big for Google to concern itself much with individual websites. More than 270 million domain names are registered globally, according to Verisign, and Google's market share is going up. The Mountain View, California-based company is secretive about the timing and features of its algorithm changes so as not to tip off the spammers.
"It's hard to get out in front of," said David Steinberg,chief executive officer of , a New York-based digital marketing company. "It's a reactionary business."
Some companies are equipped to react more quickly than others. , a publicly traded online coupon provider, lost 19 percent of its stock market value on May 22, after a report from Searchmetrics said the Panda update made its results 33 percent less visible on Google. With over $200 million in annual revenue and more than 450 employees, the Austin, Texas-based company has the resources and expertise to figure out what's changed and make the necessary fixes. Brian Hoyt, a RetailMeNot spokesman, said the company has recovered two-thirds of the keywords it lost to competitors after the Google upgrade.
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"We truly believe as a company that If we have the best user experience and the best content, search engines will treat us well," Hoyt said.
In the middle ground between family-owned websites and publicly traded companies is Doxo, a 25-person Seattle-based start-up with $19 million in venture funding. Doxo lets consumers organize and pay their bills from a single online hub or mobile app. A Google search for "pay Sallie Mae bill" shows Doxo as the first link below the education lender's own site. Some 33,000 businesses are connected to the service.
Steve Shivers, Doxo's CEO, said his site's search traffic, which in some months is more than half of total traffic, plummeted by 45 percent in the week after the Panda update. He's since been able to recoup some of those losses and is now down about 27 percent, after altering the way certain content is presented. Shivers knows not to fight with Google—which he likens to arguing with God about the weather—but he says the upgrades have unintended consequences, damaging businesses like Doxo that aren't spammy or even ad-supported.
Shivers' best guess as to why his traffic dropped, based on what his team has observed, is that sites with more content and more ads are being bumped up higher in search results. Shivers said he has to compete for better placement, even if he disagrees with how that placement is determined.
"It's not necessarily the site we want to design or that our users want to see—it's what Google's algorithm wants to see," Shivers said. "Higher search placement gets the traffic."
Stradley and Shivers share one major complaint: Google's lack of transparency. Both founders are investing in alternative online marketing efforts so they can be less dependent on Google for users. Stradley's service has 25,000 "likes" onFacebook, and her two daughters are helping her build a presence on Twitter, Pinterest, Instagram and Google+. Shivers is holding his developers accountable for making sure Doxo gets discovered in the various mobile app stores, and he's also experimenting with social media.
Freidenfelds said that Google doesn't comment on specific websites, but he recommends that webmasters stay in touch with Google. The company supplies small businesses free tools like how-to videos, advice and live office hours via video chat to help them optimize their sites, he said. Stradley admits that she should have kept more up to date with Google's changes but hasn't had the time because she's so busy working on content.
She also says that Google used to reach out to her, proactively providing SEO recommendations. That correspondence stopped in recent years, forcing her to do her own research when traffic dipped to figure out how to get her pages properly tagged and coded.
"In the old days when Google first started they'd send you Christmas presents," Stradley said. "You felt like you were appreciated. I want to keep working with Google but I'd like to know about changes."
—By CNBC's Ari Levy.