Comment Making SEO SOL (Score 3, Interesting) 287
Option 1: Defensive tweaking of ranking algorithm. Craig Silverstein estimated in a talk a three years ago that "most" of the thinking with respect to ranking was in response to battling SEO. And that was before anyone knew what SEO stood for.
Option 2: Lower the cost of advertising. If you can put your link in a banner ad more cheaply than using SEO to get the top result, you'll probably take that path. The cost of advertising has a direct impact on the viability of the business of SEO.
Option 2 isn't bad: if Google lowers the cost of advertising, their margins shrink, but less investment in defending SEO will be required, and results will be more relevant.
Furthermore, option 1 is hard. To fight SEO, you need to distinguish between that portion of the web which is a network of human-created links, and that portion which is doing its best to simulate being human-created. This is an AI-hard problem.
Ultimately, google needs to strike the right balance between options 1 and 2. They need to make SEO more expensive than it's worth. My guess is that, right now, there is more than one open spreadsheet devoted to figuring out that balance.