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Google Ranking Fluctuations - Why Does it Happens for New Pages?

Webmasters often see an interesting trend of Google rankings for new pages. Fresh and relatively new pages are ranked highly for a specified period of time and then they gradually loose the rankings. This trend of getting good Google rankings and losing them overtime confuses the webmasters. Matt Cutts has come up with a video which explains the reason for this sort of behaviour from Google.

The short explanation for this sort of behaviour is that Google takes some time to judge the relevancy of new pages and compares it with older pages. New pages created on newsworthy topics like some latest news receive a boost in rankings and then gradually loose the rankings when more and more webpages start competing with each other on the same topic. Hence, the more competing pages on the same topic gives way for the loss in rankings over time.