XLMedia has warned that its revenue could take a hit, due to recent algorithmic updates from Google.
Recently, the affiliate marketing company’s shares declined by 29.4% after it announced changes to rankings on this search engine.
A potential effect
In a trading update, XLMedia said that its site demotions within Google were done manually. This was despite it coinciding with search algorithm changes, which were rolled out on 13th January.
According to Google, this update was completed by-and-large by 16th January.
XLMedia said the following: “On 18 January 2020, the company became aware that a number of its casino sites have been manually demoted by Google, which impacts the visibility of the sites and their ability to generate meaningful levels of online traffic, and hence revenues, from new visitors.
“Whilst it is too early to accurately assess the financial impact of this action by Google, any further material delay to the full restoration of rankings of these online assets would result in a corresponding reduction of both revenue and adjusted EBITDA during that period.”
It continued by offering some clarity on what had happened and next steps.
“The company confirms that the Group’s other online publishing assets remain unaffected. A process of review is now taking place, with a view to resolving any issue as soon as possible. The company will provide a further update in due course as more information becomes available.”
Taking multiple hits
Following the above announcement, XLMedia’s share price dropped from 46.05 at 3.55 p.m. on Monday to 32.50 by the close of trading.
Regulation in the first half of 2019 previously contributed to a year-on-year revenue decline of 10%. This was revealed in September last year.
In the final month of 2019, XLMedia announced plans to launch a strategic review. Depending on the result of this, the company might overhaul its current operational model.
