Google (GOOG -0.86%) (GOOGL -0.73%) recently tweaked its search algorithm to favor "mobile friendly" websites over non-optimized ones, which could cause clunky desktop sites to plunge in search rankings on smartphones. Rankings on tablets and desktops, however, won't be affected.
Companies' websites must meet Google's mobile standards to preserve their rankings. These requirements include text which is large enough so visitors don't have to zoom in or scroll horizontally. Links should also be easily clicked via a touch interface, and the layout must be optimized for smartphone screens.
But as of early April, 46% of Fortune 500 companies and 29% of the top 500 retail sites had not received Google's "mobile friendly" designation yet, according to marketing firm Merkle/RKG. This could cause a big shuffle in mobile search results, which industry watchers have dubbed "Mobilegeddon."
Why Mobilegeddon is good for companies
"Mobilegeddon" might sound like a brutal reckoning, but it's actually a win-win situation for mobile users and businesses. Smartphone users get easier to read websites, which could persuade them to order more products and services.
Last February, ad network InMobi found that 60% of Internet access mostly came from mobile devices. In October, The Integer Group and M/A/R/C Research found that between 2012 and 2014, the percentage of shoppers using mobile devices to make purchases rose from 25% to 35%. The study also found that 15% of shoppers spend just a "couple of minutes" between discovering a product on a mobile device and purchasing it. Only one in ten shoppers downloaded a retailer's native app.
This tells us two things: a well-designed mobile site will generate more purchases, and native apps aren't ideal replacements for mobile sites.
Why Mobilegeddon is great for Google
When Google sets new design standards for websites, companies listen, since it processes 62% of searches worldwide, according to Net Market Share.
"Mobilegeddon" is just part of Google's strategy to tether more mobile websites to Chrome and Android. Another part is the recent addition of push notifications from websites to the desktop and Android versions of Chrome. This means that users can let participating websites deliver notifications and promotions straight to the Android notification shade or PC desktop, even if Chrome isn't running.
When we combine the push notifications with the forced upgrade for mobile websites, Google's plan becomes clear -- to reduce the need for "native" apps, which companies previously launched to deliver push notifications, and boost dependence on mobile sites.
Native apps harm Google's core business by cutting Chrome out of the loop. That leaves gaps in Chrome's history tracking abilities, which Google needs to craft targeted ads.
Growing pains ahead
Google's last big search algorithm change, code-named Panda, occurred in 2011. That change, which penalized "low quality" spam sites, affected 11% of all search results, according to SearchEngineLand editor Danny Sullivan. That change crushed "content farms" like Demand Media (NYSE: DMD), the parent company of eHow, Livestrong, and Cracked.com.
However, flushing out low quality sites improved the quality of Google's search results. The new mobile update will do the same by forcing stubborn companies to upgrade their sites. More importantly, it's an important way for Google to boost the relevance of mobile sites against native apps.