Google Panda Causes Demand Media Shares To Drop By 10 Per Cent

Google's search algorithm update, commonly known as Panda, has caused the shares of content producer Demand Media to fall by nearly 10 per cent since the 12th of April.

The company's shares are currently worth $20.17 with the company being now valued at $1.67 billion. The company filed an IPO on the 12th of January, two months before the first major update to Google's search algorithm hit the US.

Ironically, Demand Media's Initial Public Offering was supposed to be offered in December 2010, but had to be postponed because of the Securities and Exchange Commission's concern over the company's definition of "long-lived content", a concept on which its whole business strategy hinges.

Demand Media's flagship website, eHow.com, wasn't affected in the first update but it seems that Google has tweaked its search algorithm further leaving eHow with no chance when the new update was rolled out.

Back in March, eHow was singled out as being the only big content farm to have been left unscathed by Google's first update, while eHow US and eHow UK have lost 53 per cent and 72 per cent in what SearchMertrics call the Visibility OPI (organic performance index).

How it will translate in terms of lost traffic depends on how much traffic eHow normally received via Google. According to Alexa, around 70 per cent of users of the UK site visited a Google site immediately before visiting eHow.