Over the past 24 months, we´ve all been reading about Google´s panda and penguin updates and their unprecedented effects on organic serps, however, few grasp why Google makes changes or why their business model requires them.

For the internet outsider, Google´s changes are apparently designed for the “good of the web”, to garner more accurate results for users and keep Google competitive in the search market. Nevertheless, web insiders know that Google has little if any real competition as of 2013 and their market share is slowly but surely raking away the miniscule amounts of search done elsewhere on Bing, Yahoo etc. So, what’s my take on Google’s algorithm changes designed to impact serp´s (search engine results pages)?

In order to answer the above question we need to first look at a grass roots business and, how businesses evolve and grow. Right off the bat, most business people have a firm grasp on the economics of businesses and their fixed costs. Fixed costs are things like power, office space, staff and other intangible but required costs in order to run a business. It’s a known fact that as a business grows, it assumes more of the aforementioned costs, in order to handle increased commercial activity (e.g sales/services). Businesses operating exclusively online rely dangerously on their websites being both efficient and highly ranked on search results in order to amass visitors and, as such, increase sales. These increased sales translate into increased fixed cost spending, staff increases and other costs to match the increased sales. As a result, fixed costs are notoriously difficult to mitigate so, if for instance, the business in question has taken on more staff, increased its office size and matched fixed cost spending to sales, it becomes less flexible and therefore reliant on the sales volumes which imposed the increase in fixed cost spending. The vicious circle of economics…

When a business has been successful online for a reasonable amount of time and has augmented its fixed costs in line with sales, abruptly experiences a drop in sales due to losses in ranking on serp´s, it finds to hard, if not impossible, to quickly shed the staff and increased infrastructure associated with its past sales volumes. As panic hits and losses surmount, the most common solution is to return to the top of ranking and, logically, garner the sales lost through dropping in rankings. Common SEO techniques, although applicable, do not (usually) “work” speedily enough to overt monthly losses incurred through having an infrastructure (fixed costs) larger than those currently required. Therefore, most businesses will turn to Google for help, a help Google is only too keen to offer by way of its Adwords campaigns which, at a cost, will return the company to its former search position and, hopefully, sales volumes.

This new partnership with Google then becomes a “requirement” until:

a) Fixed costs are reduced

b) SEO practices return the company to its previous serp ranking

You´ll note I used the word “requirement” because, in my eyes, there is quite simply no other solution to the problem over the short term.

Therefore, by introducing algorithm ranges, Google systematically tosses around the ranking so that those who have become accustomed to high natural search listings, are directly affected by such changes and, as a result, require “search assistance” and, in Google speak, this assistance is called “adwords” which, as we all know, means dividing part of your profits with your new partner called Google.

For many who work in the internet industry, partnering with Google from the outset is probably the best recipe. Why? Well, as I have explained, building an online business which relies on Serp´s is a risky one. Whereas, building a business with Google´s adword program already built into its fixed costs can, at least generally, rely upon the results and sales generated over the longer term.

So, back to the panda and penguin updates which have been causing so much controversy? In my eyes, if Google has chosen animals to designate the names of its algorithm updates, get prepared for Cat, Dog, Fox and any others that could be coming our way any time soon.

Yes, you guessed it; these “tweaks” to search results have a reason…