3 Tech Firms That Will Live And Die By SEO

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In today’s tech world, companies live and die by SEO.

It stands to reason that an online presence is an absolute must. Not only that, but no one can claim to be the absolute best in the business when their company doesn't have a place on the web.  

Companies such as Yahoo! (NASDAQ: YHOO) and Google (NASDAQ: GOOG) have given birth to public search engines, a powerful interconnected database that makes anything and everything searchable and available with just a few keystrokes. With the potential to reach a worldwide customer base, companies have been scrambling to ensure that their name is at the top of the list.

This is done by improving SEO rankings on these sites. Search Engine Optimization is an online marketing technique that gives a website higher rankings in the organic listings of search engine results pages. This will drive more traffic to the website, hence giving more credibility and brand recognition to the company.

These things are crucial for the success of a company, and, for the savvy investor, keeping an eye on how well a company does them could spell the difference between a dud and a cash cow.

Sometimes the motive for a search engine optimization strategy is simply building awareness. Connecting with a customer base, even if it does not result in immediate sales, will gain more revenue in the long run by ensuring that the target market knows who you are and what you provide. If the website is ranking high in search engine results pages then users will associate that company with expertise in the field.

The first rule of business is to provide a service or product that people need. Google and Yahoo! are unique in that they provide the platform that is needed by both companies and consumers. SEO is one of the major ways to create business to business (B2B) or business to consumer (B2C) sales. Businesses can also pay for advertising on search engines. The ads that appear in the sidebar of search engines are designed to be relevant to the searched keyword. Thus, both Yahoo! and Google, and one cannot forget Microsoft's (NASDAQ: MSFT) rapidly rising Bing, have businesses clamoring to hand over marketing dollars to make the SEO cut.

Search engine marketing is also a low cost alternative compared to other forms of marketing that businesses use. It is arguably one of the most effective in terms of return on investment. One of the ways that companies get better ROI is by using analytics with varying metrics to measure SEO performance. Because many analytics provide real-time data, continuous monitoring and adjustments allow for quick and easy changes to remain at the top of the list – a cheap way to drive traffic to the site.

Traffic is more or less the ‘middle man’ between brand awareness and sales. The more clicks a website gets, the higher the chance of turning ‘lookers’ into ‘buyers,’ not only for their products, but for others as well. As previously mentioned, those sidebar ads create a sort of camaraderie between competitors, linking products and services together – one business offering auto parts, and a partner ad offering auto repair.

Effective search engine optimization can be a time consuming process.  Small businesses and even larger businesses that do not have dedicated SEO staff typically turn to professional SEO companies for much needed help. These are also businesses the investors can look into. As leveraging SEO becomes more essential to online success, companies such as Ask Jeeves, a product of InterActive, and HigherVisibility are seeing growth and called by TheStreetRatings ‘buy.’

Leading SEO companies like these conduct ongoing research on industry changes, so they are aware of future developments. They also stay informed through professional networking, online forum discussions, and continuous review of tips and recommendations published by search engines and other leaders in the industry. 

But this is just one aspect of a diverse (and growing) market. A niche is being carved out by companies that not only try to generate traffic, but generate a certain kind of traffic. Most people are aware of companies that are review based. With such a majority of people looking just to find a business, odds are there is also a large number looking to see how others view the company.

In summary, there are several ways an investor can profit from this tech trend. Of course, the companies that are providing the listings and ads are a must – Google, Yahoo!, and Microsoft. But the companies that are making a name for themselves by assisting other companies will also be a huge play. Business Insider has recently submitted that Google’s ad revenue alone is more than the entire U.S. print industry's.

As for other companies the investor should consider, Marketing Sherpa has released the 4th edition of its Buyer's Guide to Search Engine Optimization Firms, a comprehensive look at the players in the industry. For any investor looking to get on the train of SEO companies, this is the all-inclusive guide to companies that are doing it right. 

StockCroc1 has no positions in the stocks mentioned above. The Motley Fool owns shares of Google and Microsoft. Motley Fool newsletter services recommend Google, Microsoft, and Yahoo!. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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