[credit provider=”peregrinari via Flickr” url=”http://www.flickr.com/photos/peregrinari/2871351015/”]
We’ve seen a good amount of Internet IPOs come through over the last few months with LinkedIn, Bankrate, Renren, and Pandora. Now the next IPO is set to launch with HomeAway. I believe investors will be positively inclined to this stock as it is an industry leader in a large market with room to grow. The IPO should value the company around $2b.
However, recently I have been in contact with some very bright people over at Digital Due Diligence. They have a particular expertise in link analysis and part of their claim to fame was pointing out some of the questionable tactics that JC Penney was using to get traffic – ultimately JC Penney was reprimanded by Google and was invisible in search results for a period of time, reported the New York Times.
DDD has been very helpful in my reviewing of recent IPOs. So, when they pinged me recently to give me their thoughts on HomeAway, I paid attention. Overall, HomeAway looks like a very solid property from an SEO (search engine optimization) perspective. However, here are a few SEO issues for investors to be aware of:
1) Multiple HomeAway-owned websites rank highly for the same competitive keywords, thus increasing the odds that people land on their network of sites. This is not necessarily a bad thing – in fact it’s what SEO strives for.
2) HomeAway continues to use paid links (which is against Google’s guidelines – see Google’s post) – to be clear, “paid links” doesn’t mean AdWords, it means paying another website to link to you (which should help your site in the Google algorithm). Should Google decide to penalise them, we could see the natural search ranking impacted, which would impact their traffic.
3) The Real Problem – The combination of #1 and #2 means that if any penalty from Google were to occur, HomeAway’s fall from the search results page would be worse than just one site being demoted, it would be multiple sites.
What are some examples of Paid Links? In their analysis of HomeAway’s Lake Tahoe page, DDD highlights these external links:
1) Guidebook America, which overtly sells links here: http://www.guidebookamerica.com/add/index.htm
2) My Pet Friendly Cabin, which sells links here: (http://www.mypetfriendlycabin.com/my-cabin-rates.html)
3) Scottsdale.com which also sells links.
DDD even contacted another website (www.homosassaflorida.com) that had odd links to HomeAway and were told “Local links are $100 per year. Call me if you’re interested.”
To be clear, while DDD thinks that HomeAway is using some black hat techniques to a degree to drive a portion of its traffic, to assess the magnitude more analysis needs to be done.
DDD is unsure of any absolute impact should Google adjust, but it does want to point out potential risks to investors in case the next Panda swipe by Google (where it penalizes sites with some poor quality links) hits near term traffic.
Furthermore it’s important to point out that Google’s algorithm is well aware of this and automatically reduces the value of those links to the SEO ranking – so there may be no impact to traffic. However, Google could also do a manual penalty to adjust – but it’s unclear if it will. Nonetheless, DDD does a good job making sure that investors are aware of the issue – it’s worth hearing what they’ve got to say.