I'm afraid this announcement will just make the Flash inclined even more lazy about SEO. I remember a comment from a Yahoo! engineer a few years ago that they had been able to index Flash for some time, but that the content of Flash sites was so meager that it didn't really matter. From what I've seen this hasn't changed much.

I think there is a positive effect here, its nice to have the choice to out a flash menu or small banner without lossing ground completely seo wise.

Surely this will lead to a whole stack of blackhat flash techniques? Hidden text in Flash files - can Adobe's plug-in deal with that? Tiny flash files with loads of links, keywords, the works?

And how on earth do we, as SEOs find out why out competitors are ranking so highly when they have a blank page with a small blank flash movie on the page if we can't read it ourselves.

I foresee some hasty revisions going on before long!

While I see this as a positive step in some regards, I also see it potentially causing a lot of confusing for people who don't fully understand search.

Googlebot indexes pages, right? Pages have unique URLs, right, and unique title tags?

How many full-Flash websites do you see where the URL changes as you navigate from section to section? How about the title tag?

So what is Google going to index?

I've seen some sites using anchors to navigate Flash, which is perhaps the right way to do it in light of this new development. Slide shows within an HTML page will likely now be indexable. Anchors in Flash menus can perhaps be followed.

But building a site completely in Flash, whereby only one file loads and the URL/Title doesn't change as the user navigates, is still going to be a shot in the foot for anybody hoping to pick up a lot of search engine traffic.

Not to mention the usability issues...

This improves the indexability of Flash, but Flash websites will continue to make it difficult for users to deep-link pages within an all-Flash site. These sites will still be ranking-impaired from a PageRank point of view.

What about XML copy- will this be crawled? in the same manner or is it only the embedded text?

A while ago I was playing with the SDK and while I could see that embedded text could be read if that text was in a movie clip (let's say a button that said "home") the text was repeated for each fraem of the movie clip. Having the word "Home" show up 15 times on one page could cause problems.

I suppose the word home will not hurt if there are other pieces of custom text on each frame.