News has surfaced today that Google took a closer look at Overstock.com’s linking strategy and decided it was appropriate to devalue links which had previously helped the site gain great organic rankings. Similar to the news of JC Penny last week, organic rankings in Google for Overstock have fallen from the first page of search results for broad search terms such as “laptop computers” and “vaccum cleaners” down to pages 5 or 6 in Google – a move that is sure to hurt the overall traffic and revenue of this online-only retailer.

What Overstock.com Did

In a more savvy move than JC Penny, Overstock.com as offering college students and faculty discounts on their site and encouraging the sites to link back to Overstock.com. As mentioned in the WSJ article – .edu links are typically considered more valuable in Google’s ranking algorithm. Most online retailers don’t naturally receive a lot of .edu links as the correlation between shopping and educational sites aren’t always very clear. So in Overstock’s case, having a lot of links from .edu sites easily allowed them to rank well organically, over sites that may actually be more relevant for the search terms that Overstock was ranking for.

What Overstock.com Did Wrong

In the above description, Overstock did nothing inherently wrong. They were honestly offering a discount to a group and recommended that they link back to the site. In the world of internet usability, that is a plan that makes sense. As a potential customer, I would be annoyed if a company was offering a discount on their site, but didn’t send me a link to easily shop there. However, what Overstock.com did was ask those sites to link back to their site with keywords like “bunk beds” or “gift baskets” to manipulate and hopefully improve rankings for those generic terms. The natural inclination for those sites would be to link back to the Overstock.com homepage using their brand name as anchor text. In the end, it was the anchor text that set off Google to what became Overstock’s effort to manipulate search results.

Optimized anchor text is an SEO’s dream. It basically signals to Google that the page I’m linking to is relevant for whatever text I use for that link. However, in my experience most non-SEO focused webmasters will pick a brand name or the infamous “click here” to use as anchor text. Like all link building strategies, using only one tactic in large quantities is most likely to get your site penalized.