Google's Algortihm Change Hits Answers.com

Answers.com (nasdaq: ANSW) reported that traffic on its web property dropped 28% last week due to a change in Google's (nasdaq: GOOG) search algorithm.

Answers.com is heavily dependent on Google for search-related traffic, and this has already impacted its stock price and possibly will online advertising revenues.

The company is in the process of acquiring Dictionary.com for $100M and has file a offering papers with the SEC to raise $140M for the related purchase. The primary motivation for the deal is to secure a steady source of direct traffic and mitigate from dependence on search engine algorithms.

Bob Rosenschein, CEO of Answers.com said, "On a pro forma basis, we expect at least 70% of our total traffic to come from people navigating directly to our Web properties or typing the term ‘dictionary’ in a search engine.”