A WebmasterWorld thread has a discussion around a new Microsoft research paper named Domain Bias in Web Search (PDF).
The paper describes how reputable and popular domain names have a strong bias in the search results. Searchers are more likely to click on the results from a popular domain.
What is the issue with that? Well, they say in the paper that the "existence of domain bias has numerous consequences including, for example, the importance of discounting click activity from reputable domains."
In short, if Bing uses click data for ranking purposes, which they do on some level, then they have to factor in discounting in clicks from reputable domains to reduce the bias searchers have towards them.
Why does it matter if reputable domains get clicked on more, they should? Well, according to their study, in a blind searcher test - if you remove the domain factor, searchers are much less likely to click on those results. So to remove bias in the search results, they want to dampen the click factor ranking algorithm to not artificially inflate those results.
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