“Our position is that search is a very hard problem. We have still a lot of work to do,” commented internal engineer, Douglas Merrill, noting that 70% of Google’s efforts still go into improving search, as opposed to developing other services.

“It is not enough to have the information, the information should be right,” Merrill went on to say. “Sometimes the problem is figuring out what the users mean, not what the user said.”

At this point, some of Google’s main projects include improving mobile web search, personalized search, and language translation features, as well as finding new ways to combat SEO spam.

By keeping its focus on core search functionality, the internet giant is demonstrating its belief that no search algorithm can be “too good,” while recognizing the continual progress of competitors. This goes to show that even the mighty Google must work hard to maintain the upper hand against rivals like Yahoo and Microsoft.

Many virtually unlinked and unheard of sites rose significantly on the scale, without any official explanation from the search giant. Two of my sites that were affected were handsetreviews.com and carriermix.com. Both were ranked 0 out of 10 before the change, but rose to PR6 afterwards. Other sites have been known to rise as high as PR8 as a result of this update.

The strange thing is that this was not a normal update, as it only made a difference to newly created PR0 websites, and didn’t affect most internal pages (at least in my experence). Reaction from other webmasters can be found at this SitePoint forum thread.

Many webmasters believe that this unusual update could further devalue the meaning of PR (which is meaningless enough already for SEO purposes), but I am currently mulling a theory that Google could have a different opinion altogether.

I find it somewhat unlikely that the world’s biggest search engine would deliberately destroy the entire PR system. Rough and inaccurate as it is, the PR scale is the only way to get a simple reading of a site’s backlink weight, directly from Google.

Instead, my theory is that Google is turning PR itself into an elaborate experiment. They could be attempting to make it a more accurate measure of a site’s value, updated on a frequent, or even constant basis. Such a figure can’t be expected to be totally accurate right away, but if Google is trying to introduce such an improvement, I commend them for it.

Now, I must warn you, this is just a theory, and I make no guarantees that it is correct, but it’s quite a possible explanation in my opinion. Whether Google has success in implementing it is another matter altogether.

“This report confirms our belief that search engine marketing has almost single-handedly revived a flagging online advertising marketplace after the stock market crashed in 2000. As consumers have become increasingly reliant on search engines to navigate the web, investors have shown a renewed interest in the digital technologies — and in search marketing in particular,” SEMPO chairman, Kevin Lee was quoted as saying.

One other interesting finding was that about 80% of internet markets user some kind of organic optimization, yet of the $5.75 billion spent, only 11% of it was spent on organic SEO. This just goes to show that, if done correctly, SEO can be an extremely affordable (or even free) alternative marketing technique, in the midst of a highly expensive advertising market.

The study showed that 42% of users click on the first available result when conducting searches, while only 8% click on listing #2. Although it has long been known that the #1 result is favored by searchers, these figures do a good job of illustrating how strongly so.

Where the findings got really interesting though was when SERPs were fed through a script to reverse the order of the top two results. In these cases, 34% of users still clicked on the top result, while 12% clicked on #2.

This demonstrates that the exact same search result can go from a CTR (click through rate) of 12% to a CTR of 42%, by moving up a single spot. A very staggering difference, to be sure, and it seems to suggest that search engine users care more about positioning than actual relevancy.

For more information on the findings of this study, please visit http://www.useit.com/alertbox/defaults.html.

The study focused on firms that outsource their organic SEO and at the same time purchase PPC advertising, and discovered that 35% of these firms had a better average return from SEO, as opposed to 11% from PPC.

The study also found that more than half of marketers who fit into the above sample don’t have a clear method of determining which channel (SEO or PPC) gives them a better ROI. Although most firms do track the combined results of all search engine traffic, many fail to distinguish between the two distinct channels.