Could Google’s Next Target Be The Domain Industry?

In my last post, I highlighted how Google’s latest algorithm change hasn’t had a negative impact on the people who leverage content farms to rank their own sites — in fact, my AdSense earnings through March 14 are nearly double what I earned in all of February… and I rely heavily on article marketing to rank my sites.  The actual content farms themselves (at least some of the big ones) haven’t fared so well.

Wisegeek, Ezine Articles, Suite101, Hubpages, and many others really took it in the pants on this one — here’s the data to prove it (chart from Sistrix):

OUCH! Mahalo, which also got brutalized by the big G’s new algorithm (see #14 on the chart above), responded by promptly laying off 10% of their staff as a result of the change.  Google changed its mind about what’s important in search, and the fortunes of a bunch of companies changed instantly.  I’m thinking a lot of people started polishing up their resumes in early March.  But that might not be the worst of it… it looks like Google has it’s next victim already lined up in its sites.

Matt Cutts Fires a Warning Shot at Google’s Next Victim?

So content farms got whacked (note however that my new little farm has been getting plenty of G love).  End of story right?  Not so much.

Just a few days after the Farmer algorithm blows up, Matt Cutts drops this gem in a video response to an email he received: Google’s considering turning down the power of exact match domains.  See for yourself:

And just like that, millions of domainers and developers mess their pants… well, not entirely.  It’s just talk at this point and nobody knows when or if Google will really implement this change, but I’m sure it’s coming at some point.  And when it does, lots of people who are sitting on undeveloped domains are going to realize that they should have gotten off their butts and leveraged those assets while they still had efficacy.

Why Are Domains Valuable in the First Place?

The very best domains in the world are valuable because they are brandable, memorable, and keyword focused.  Hotels.com, CreditReport.com, LifeInsurance.com (even though it’s being used wrong) — they get type in traffic and work perfectly as brands.  Those are ultra premium domains and they won’t be affected much by anything Google does.

The rest — the stuff that targets longtail terms — derive almost ALL of their value from the fact that Google gives exact match domains (EMDs) a huge boost in the search rankings.  When those rankings boost are gone, what value does DogObedienceTrainingVideo.com (it’s a parked domain… not mine) have over dogvids.com (parked) or trainingpro.com or any other semi-related brandable name you could think of?

Is any advantage it might still hold enough to merit paying $X,XXX for it when you could register an adequate alternative for less than $8 at GoDaddy with a coupon code?  Not really.  You could buy the $8 name, then put a few grand toward content building and link building and end up in a MUCH better situation.  If the EMD bonus is gone, lots of people will be stuck holding worthless currency.

What Does It Mean To Flippers?

If you’re buying a site that derives its earnings from Google search traffic, make sure you don’t just know *if* it ranks — you need to know *why* it ranks.  If it’s because of an EMD benefit in an otherwise competitive niche, factor that additional risk in when you decide what you’re willing to pay.

If you’re selling, know that you might have to overcome that objection — be prepared to prove a solid link profile that would merit the ranking even on a non-EMD domain name.  You’ll also want to make a decision about what you want to hold long-term and what you might want to liquidate while it still has strong value.  What you decide to do will have to be based on your own risk aversion (and your own beliefs about whether this is a change Google will implement soon).

You might also consider reinvesting some of your short-term profits into link-building to further solidify your organic positioning for your EMD sites, should Google ever decide to roll out this change.