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Rand Fishkin

At the Seattle 2.0 Awards last week, Team GeekWire had the chance to chat with SEOMoz founder Rand Fishkin about his signature yellow Pumas and what it’s like to start a business with your mom. But we also drilled into some more weighty topics, including Google’s recent alterations to its search algorithm. Known as Panda, the release was designed to uplift high-quality Web sites in Google search rankings and downgrade pages that were of lower quality. Sites such as The New York Times’ and Demand Media’s eHow took huge beatings.

Fishkin is a SEO Jedi master, so we thought of no better person to ask about the Google Panda release.

On the impact Panda is having on SEOMoz and its clients: “I can’t be sure about correlation-causation, but it seems like that’s actually been a positive thing for us. The more Google talks about their ranking algorithm, how it changes how people have to keep up, the more people go and look for SEO information, and lots of times find us, which is a good thing. (That) means we must know something about this SEO thing. And so that’s actually been great for our business.”

On the Panda algorithm changes: “Google started using some machine learning algorithms and biasing toward what their quality raters liked, which dropped a lot of sites that had done almost classic technical SEO down in the rankings, and boosted up a lot of sites that just did great content and had a great user experience combined with it. What’s nice about it is, you’re now seeing better stuff in the search results, but of course for people who got hit by it — and there are a few startups in Seattle who got hit by it — very frustrating and tough.”

On the impact on Demand Media, owner of eHow and other sites: “They weren’t hit by the first one. In March, Google made this big update, and Demand Media, eHow and a bunch of their other sites actually did quite nicely. Had a little 5-10 percent bump, and I think they announced their earnings (with a revenue increase of 48%) so Demand Media just rocked it. That being said, they got hit by the European update, which Google rolled out just a few weeks ago, and then by a subsequent U.S. update, so I don’t know if the next quarter is going to be so good.”

Earlier this week, the SEOMoz blog offered some more technical analysis on what’s happening with Google Panda. And Search Engine Land just noted that “we’ll be hearing people continue to talk Panda for months.” (If you have any personal experiences with the Panda update let us know).

At the awards, Fishkin also provided an update on SEOMoz since spinning off the consulting business to Distilled. That appears to have been the correct decision. The company’s software revenue has grown from $400,000 in 2007 to 2010 $5.7 million.

“It can be done. You can transition from a consulting to a software company,” said Fishkin, adding that the company is now on track to surpass $12 million in revenue this year.

Fishkin — who raised cash from Ignition Partners and Curious Office Partners in 2007 — is a straight-talking, no-nonsense entrepreneur. I’ve always appreciated his in-depth and insightful blog posts about running a business, including a fantastic read this week in which he explains why he’s leaning against taking more outside capital.

Here’s Fishkin’s talk at the Seattle 2.0 Awards, which provides more background on SEOMoz and details what Seattle needs to do in order to become a more powerful innovation hub.

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