Burned by Google Inc.'s recent changes to its search formula, small businesses are experimenting with strategies to recover lost Web traffic while seeking out new ways to generate sales—some even scaling back daily operations.
Seeing a 40% decline in sales since Google adjusted its algorithm, online ergonomic-products retailer Ergo In Demand Inc. in Central Point, Ore., reduced its 17-person staff to five, moved to a 4,500-square-foot office space from one more than double in size and cut $4,000 in monthly software subscriptions.

With the savings, owner Peter Scholom hired a search-engine optimization firm to do an audit of the 11-year-old company's website, ergoindemand.com. He hopes to learn how to regain the site's previously high Google rankings for search terms like "keyboard trays" and "TV mounts."
"We are fishing for any straw," Mr. Scholom says, whose business had $6 million in sales in 2010.

Many small but growing Web retailers say they have been punished since Google, which handles nearly two-thirds of all Web searches, moved in late February to weed out "content farms," or sites that post information without attention to quality or by copying text from other sources such as government websites.

But the impact was also felt by large e-commerce sites. Wal-Mart Stores Inc., Target Corp., and eBay Inc. appeared to rise in search results, according to companies that track Google rankings. One shopping site that has benefited, Buy.com, says it was "delighted" by the initial change.
Google says the modifications to its algorithms impact about 12% of U.S.-based search queries, and further changes rolled out earlier this month affect an additional 2%. It hasn't named sites that would win or lose prominence in its rankings.
A spokesman for the company acknowledges that legitimate businesses might have inadvertently suffered from the changes. "We tested this update extensively and have found that the algorithm is very accurate at detecting site quality, but no algorithm is perfect," the spokesman says.
Sites Retool for Google Effect - WSJ.com

Like the spokesman from Google says "No algorightm is perfect", too bad if you have a little quality site affected...Ahhhh what a selfish reasoning for a leader in search...

What do you think about the affected sites and what strategies to recover lost Web traffic they should take?