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The Financial Impact of Google Panda Updates

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The Financial Impact of Google Panda Updates

In an attempt to increase the quality of Google searches, in February of this year, Google rolled out its first “Panda” updates, aimed at devaluing sites that provide low-quality content.

In the wake of the rejigging of search algorithms, many sites ranging from content farms, voucher sites and technology news sites, have all seen their rankings on Google drop considerably.

Subsequently, most also witnessed a substantial fall in traffic.

While many web readers applauded Google’s attempt to mark certain sites as offering only shallow and low-quality content, one serious consequence has been a negative financial impact on the global economy that many people are unaware of.




Online Writing Income Supported Entire Families

People often underestimate the amount of money that can be potentially earned through working online.

Writing content for websites, particularly the pre-Panda content farms, provided countless individuals with an income they were able to live off.

Because these workers can produce such content from home, online working is particularly favourable amongst housewives, students, and mums and dads with young children still at home.

In the wake of the lost traffic caused by Google Panda Updates, some sites, seemingly unable to recover from their Google demotion, are choosing to lay off workers.

The LoveToKnow Train Wreck

One such site is LoveToKnow, an “informational” website for women, which, according to the site’s by-line, “is a growing community of over 6 million women looking for expert advice on over 80 topics.”

For the most part, it doesn’t take very long browsing through the website to see that the business focus all along has been to capitalize primarily on keyword SEO research, and to produce articles only for the purpose of capturing search engine traffic.

According to Pandalized.com – a site that has traced and graphed those websites that have been the most negatively impacted by Google’s Panda update – LoveToKnow.com’s daily traffic rank trend has been hovering around the 2000 mark since 2009, but it experienced a dramatic fall in traffic to less than half following the first roll-out of the new algorithm in February of  this year.

ltk drop

After a couple more Panda updates later in the year, LoveToKnow’s traffic never recovered and was eventually put entirely out of commission.

Sistrex, the SEO analysis company, compared one million keywords before and after the algorithm change occurred.

Sistrex published a list of the top 100 domains that suffered the worst losses.

AssociatedContent was found to have biggest number of losses, having 216,419 top rankings before the change, which fell to 53,512 rankings after the change – a loss of 75%.

LoveToKnow ranked 15th on the chart, experiencing a drop of 31,711 top rankings after the Panda update – a loss of 64%.

Despite ranking 15th on the drop in rankings chart, below the likes of AssociatedContent, Suite101 and Wisegeek.com, LoveToKnow was one of the only websites that made it on nearly all the lists of Google’s top offenders.

That constant negative recognition from those analyzing the Panda updates makes it clear that LoveToKnow was hit harder than most other content mills after the Panda updates.

ltk layoffs

The Sudden LTK Layoffs

According to LoveToKnow’s own profile, it is apparently “…taking the media world by storm, serving approximately 10 million page views per month and continuing to attract increasing numbers of visitors with useful and unique content.”

In light of this alleged impressive traffic, what did the company do in the wake of the Google Panda updates?

On August 19, 2011, LoveToKnow issued notices to almost 100 of its writers and editors, informing them that it was their last day at work.

In LoveToKnow’s “Jobs and Careers” section, there is a rather ironic article titled, “Layoff Rights for Work”, which informs readers of the rights they may be entitled to if a layoff wasn’t their fault.

As far as TopSecretWriters could determine, the LoveToKnow layoffs did not pay attention to most of those so-called ‘rights’ for those impacted by the loss of work. On the contrary, the layoff’s came without any warning, and without any offer of assistance to those workers – many of whom were sole providers for families of young children.

Insights from Inside LoveToKnow

TopSecretWriters interviewed one worker, who wished to remain anonymous. She was one of those workers that were recently laid off from LoveToKnow, after working for the company for five years.

The online worker in question had quickly been promoted from a staff writer (entry level position) up to Group Editor (top level position) before LoveToKnow became, in her words, “much more rigid in regards to hiring and promoting writers.”

woman bed

The worker in question was, on average, working from 35 – 40 hours a week for LoveToKnow.

Although, being the sole earner in the household and with a family to support, she always made an effort to have a few backup projects going on.

Unfortunately, these backup projects became increasingly more difficult, as LoveToKnow became more demanding in the amount of work they expected from their workers.

“They were [LoveToKnow] less than thrilled about us writing for other websites, so I tended to stick with projects that wouldn’t come with a byline,” the online worker told TSW.

As a consequence of such high demands placed on her, LoveToKnow eventually provided for about 75% of her family’s income.

Poor Management Practices

On August 19, the Group Editor received an email from Howard Love, the site’s owner, saying that effective immediately her services would no longer be required.

Although the editor was not allowed to finish editing or any administrative tasks, she had the option to finish any articles she had in progress and, as a group editor as opposed to a writer, she was at least paid a portion of her wages until August 31st.

When asked about how the layoffs may financially impact the families of those laid off, the anonymous worker said:

“The message [email] actually made it sound like it was to be a small number of people being let go, so I was shocked to see how drastic the cuts were. I had been close to a number of writers I supervised as group editor, so I knew that many of them were having financial problems similar to my own and were going to be devastated by this loss of income. Knowing that these talented people I’d come to respect and genuinely care about were going to be suffering because of LoveToKnow’s poor management practices was almost as bad as dealing with the impact of the layoff on my own family.”

For a website owner that had sent baby blankets and congratulation letters to writers and editors that had recently given birth, Howard Love did not appear to share the same compassion when it came to laying off almost a third of his staff.

According to the anonymous editor, because of the abrupt nature of the layoff, it “still feels like a slap in the face”.

Misleading Information Leading Up to the Layoffs

Sharing these sentiments is another female who wrote content for LoveToKnow for four years.

The writer – who also wishes to remain anonymous – is disabled and unable to work outside the house. Because of this, and because she was required to devote so much time working for the company, LoveToKnow was her main source of income.

When TopSecretWriters asked her whether she felt Howard Love had been fair in how he had laid off his workers, the writer said:

“Definitely not – All the while we were being told that all the changes were to make the website stronger and better. They were not truthful at all. It has taken away the income we used for food and the electric bill.”

Most online workers, such as those working for LoveToKnow, are employed as independent contractors as opposed to employees.

According to WebTax, independent contractors do not need to satisfy all of the twenty common tax law factors that employees do.

These ‘rules’ include not having a ‘time clock’, as independent contractors set their own hours, they can have other jobs – as independent contractors should have enough time available to pursue other gainful work, and they should be able to control where they work.

worker status

Stretching the Definition of Independent Contractor

Does LoveToKnow adhere to the tax laws and rules regarding what constitutes an independent contractor?

According to one ex-LoveToKnow worker, many of those working for the company should have been employees, since “they spend a large chunk of their time on LoveToKnow, and [now] have to deal with a huge income hit.”

According to the laid off workers, the company was “less than thrilled about its workers writing for other websites”.

In fact, the company was so emphatic about this, that many of its workers felt compelled to find anonymous work that came without a by-line. Unfortunately, since a byline augments an online writer’s reputation, these writers are now left without any way to prove their past writing experience other than their LTK work.

According to tax law, “rule number 8” defines an independent contractor as a worker that “…should have enough time available to pursue other gainful work”.

Another common law factor of what may classify workers as independent contractors is that “no permanent relationships with the company should be formed.” This is clearly one rule that diverges significantly with LoveToKnow management practices, according to the views of one of LoveToKnow’s recently laid off editors, who told TSW:

“I think part of the reason the layoff feels personal is because LoveToKnow was set up to encourage us to get attached to each other. Even though most of us were classified as independent contractors and not employees, there was so much more structure to how things were done and how we related to each other that it wasn’t too different from working in a traditional office environment.”

LoveToKnow’s practice of classifying its workers as “independent contractors” suits the bottom line of its owner in terms of tax savings, as well as legal issues related to laying off workers without warning or without assistance.

Too Little Too Late

Unfortunately, the classification does not suit the current status of these laid off workers that now have no recourse to obtain unemployment benefits to support their families or recover from the significant financial impact of losing their job.

Coincidentally, after TopSecretWriters contacted Howard Love with questions about whether LoveToKnow had offered the laid-off workers any post-layoff employment assistance, most of the ex-LoveToKnow workers received an email from Ann MacDonald, the company’s general manager, offering three months full subscription to Flexijobs, a site that lists telecommuting jobs, and is also affiliated with LoveToKnow.

Mr. Love, however, was not so welcoming to our questions, and refused to answer any requests for comment on the subject. Despite his promise to ring me back, I never heard from Howard Love again.

This fact only amplified my perceptions about what kind of a man Mr. Love really is.

obama speech

Google’s Impact on the Global Economy

With one in ten Americans currently unemployed, the financial impact of Google’s Panda updates could not have come at a worse time.

Google’s intention to weed out scraper and spammer sites from the search engines in order to enrich users’ experience whilst Googling came as a major blow to those sites that Google deemed as low quality.

Given the financial crisis that America and much of the world is facing, with unemployment being at the forefront of this poor economic climate, should Google have foreseen the financial impact its tweaked search algorithm was going to have on the online community – a community that has opened up more and more business and employment opportunities for people across the world?

As President Obama, hoping to stem the tide of poor economic news, proposes a $447 billion jobs plan, including $250 billion in tax incentives for small businesses and employers, the “independent contractor” status provides such laid-off workers with no recourse.

After LoveToKnow laid off so many workers without warning, that status means that those workers are now not entitled to state aid, unemployment insurance or any of the “neighbourhood rehabilitation” benefits that President Obama passionately talks about as being part of his Unemployment Extension Plan.

Instead, LoveToKnow’s ex-workers get a paltry three months free subscription to Flexijobs, and no doubt many hours of trawling through Google looking for other jobs.

Thanks to the “independent contractor” status of these laid off workers, they are left, in the words of one ex-LoveToKnow worker, “spending sleepless nights worrying about how I am going to pay the mortgage, keep food on the table, and explain to my son why he’s not getting the big birthday party I promised him.”

Full Disclosure: TSW Owner/Editor Ryan Dube formerly wrote and edited for LoveToKnow. For this reason, Ryan did not work on the research or the creation of this article. TSW investigator Gabrielle embarked alone on a quest to get to the bottom of the LTK layoffs, and in this humble website owner and editor’s decision, she did a stellar job.

Originally published on TopSecretWriters.com

  • Anonymous

    As a former employee of LTK, I just want to say that I was upset at first, but am thankful now that they let me go. I am worth so much more than they were paying me and the managing editor, Debbie Vasen, did not value my work or experience as an editor/writer.

  • Anonymous

    The problem is you don’t know what Google wants.

  • Anon

    Ryan, I must applaud your courage in writing this brilliant and insightful article. The writing appeared on the wall for a long time, but the Love To Know powers that be dismissed it as graffiti. The awkward keyword requirements, along with the rephrasing of the same titles almost every month was a panda banquet waiting to happen. If the PTB had ever thought to ask people why they were not fulfilling their 20-article per month requirement, they may have gained enough insight to prevent the panda attack. 

  • You have a lot to share in your article and I have learned so much from it. Thanks for the great information because I did not know that this can be possible and we can do something about it to improve the banner that we are making. I will probably try this.

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Top Secret Editors

Ryan is the founder of Top Secret Writers. He is an IT analyst, blogger, journalist, and a researcher for the truth behind strange stories.
 
Lori is TSW's editor. Freelance writer and editor for over 17 years, she loves to read and loves fringe science and conspiracy theory.

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Gabrielle is a journalist who finds strange stories the media misses, and enlightens readers about news they never knew existed.
 
Sally is TSW’s health/environmental expert. As a blogger/organic gardener, she’s investigates critical environmental issues.
 
Mark Dorr grew up the son of a treasure hunter. His experiences led to working internationally in some surprising situations!
 
Mark R. Whittington, from Houston, Texas, frequently writes on space, science, political commentary and political culture.

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