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Overstock.com Lands in Google's Penalty Box Over Links-for-Discounts Deal

Danny Goodwin
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Overstock.com was enjoying some great rankings earlier this year. Unfortunately for Overstock, Webmaster World began examining why they were seeing such great rankings for numerous common terms, a review which led to yet another mainstream news organization "outing" a major retailer for linking practices.

Last night, the Wall Street Journal revealed that Overstock was boosting their rankings by "encouraging websites of colleges and universities to post links to Overstock pages so that students and faculty could receive discounts on the shopping site. Overstock said it discontinued the program on Feb. 10, before hearing from Google, but said some university webmasters have been slow to remove the links."

In Overstock's case, the retailer offered discounts of 10% on some merchandise to students and faculty. In exchange, it asked college and university websites to embed links for certain keywords like "bunk beds" or "gift baskets" to Overstock product pages.

After ranking in the top three of Google's organic search results, Overstock has now dropped to the fifth or sixth pages on searches for terms such as [vacuum cleaners] and [laptop computers], much like JCPenney suffered after being outed by a New York Times article less than two weeks ago. Forbes was also penalized this month for selling links.

Links from .edu (and .gov) sites are viewed as the most trusted and authoritative by Google's algorithm. Overstock.com would highlight URLs and desired anchor text for the people to use:

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The WSJ story noted that Google took action after a competitor complained. Will be interesting to see if more competitors beging outing each other.

Many SEOs are split on whether what Overstock.com did actually violated Google's rules, or if this was just a case of good marketing that is being punished because Google was made to look stupid in the public eye. What do you think?

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