By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Investors sold Expedia Inc.
shares Tuesday following a report that it has lost a quarter of its
search visibility on Google due to the search giant penalizing the
company over so-called "unnatural links" involving search terms
related to the online travel agency.
Expedia (EXPE) shares ended the day down by 4.5% at $67.67,
after Internet search information site SearchEngineLand said
Expedia's search visibility on Google (GOOG) has recently fallen by
25% due to a penalty imposed by the world's largest search engine.
The penalty is meant to punish Web sites that pay for links on
other sites in an effort to get better search results on Google.
Expedia is said to have seen big declines in several travel-related
keywords such as hotels, tickets, vacation and airline.
Daniel Kurnos, an analyst with the Benchmark Company, said that
with Google a major driver of Web traffic, "we've seen similar
situations where sites end up in the penalty box for link buying,"
which ends up inflating a company's search-engine results.
"Expedia agrees to affiliate links that have little to do with
their product or relevant verticals, or buys additional, irrelevant
keywords to 'fool' the algorithm into thinking Expedia is a more
ubiquitous and relevant search return than it actually is," Kurnos
said. "Thus, when a truly relevant keyword comes up, Expedia ranks
more highly in terms of overall traffic and search popularity, and
so its results are ranked higher by Google's algorithm."
It is not yet known if the paid-linking effort was done directly
by Expedia or through an outside company, but Kurnos called the
practice "an old, old game. Only the players change. Everyone
cheats. It's just about not getting caught."
For its part, Google shares rose by $13.17 to close at $1,163.
Before the market opened, analysts at Pacific Crest and Credit
Suisse both raised their price targets on Google to $1,450 a
share.
Apple Inc. (AAPL) rose by $8.40 a share to $549.07, helping
boost the Nasdaq. Societe Generale analyst Andy Perkins cut his
rating on the company to hold from buy.
Among tech companies reporting quarterly results Tuesday, IBM
Corp. (IBM) was down by almost 1% to close at $188.43; Texas
Instruments Inc. (TXN) shares also fell nearly 1%, to $43.85 and
Advanced Micro Devices Inc. (AMD) slipped by a penny a share to
$4.17.
Read more on IBM and AMD after hours.
More tech news from MarketWatch:
Apple cut to hold over iPhone sales concerns
Verizon swings to profit amid subscriber growth
Your home will soon be a giant iPhone
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