I heard some people say that they are working on a SEO project whereas some others say that they are working on SEM project. I would like to know the difference between SEO and SEM?

I think both are same. Search engine optimization will help to get high SERP on search engines. This will bring more traffic and sales.

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I strongly oppose, though I do not have any fair concept about them.

Search Engine Marketing and Search Engine Optimisation - whats the difference?

Recently it was asked 'what's the difference between search engine marketing (SEM) and search engine optimisation (SEO)'? Generally - there is confusion about these two terms - experts don't even agree! Here's our take on the definitions of these two terms - and the differences between the two processes.
Search Engine Marketing defined:

Search engine marketing (SEM) refers to the short text advertisements which generally appear at the top or down the right hand side of search engine results. These are often labelled as "sponsored Links" or "sponsored results". These advertisements are generally purchased from GoogleTM (the Google AdwordsTM product), or Yahoo! Search Marketing (YSM - formerly Overture)TM (YSMTM supplies the paid search advertisements to Yahoo!TM Search, and ninemsn Search, here in Australia).

Advertisers bid in a never ending 24x7x365 auction to determine the highest placed advertisement. Google's system also factors Click Through Rate (CTR) in its ranking of advertisements. Search Engine Marketing process is often generically referred to as "pay per click" (PPC) advertising because you only pay when someone clicks on the advertising link, not when your advertisement is displayed.

Search engine marketing (or, more correctly, search engine advertising) is effectively paid advertising in search engines, where you 'Pay Per Click' (PPC). It is text advertising delivered in response to 'trigger' words typed into the search box. The surfer types in a search phrase, the PPC advertisements which have bid on that phrase are displayed, and if the surfer clicks on a text advertisement they are taken to the advertiser's website. At that point, the advertiser's account is charged for the 'click through' by the search engine's advertising partner.
Search Engine Optimisation defined:

Search Engine Optimisation (SEO) is defined as the process of building pages in a manner which enables the pages to rank highly in 'algorithmically' determined search results, which are generally displayed on the left hand side of the page. The 'algorithmic' results are independently determined by the search engine's own mathematical algorithm, and are based on relevance to the search phrase. Search engines use complex mathematical algorithms to determine the relevance of indexed pages for a particular search phrase. The algorithms are generally understood to factor over 100 'on the page' (i.e. the words used on the page itself, their location, repetition etc.) and 'off the page' (i.e. links pointing to the page, site popularity etc.) aspects in the calculation of their results.

Search engines index HTML code. Before a website can rank in a search engine, it has to be designed with accessibility in mind. Search engines are effectively text browsers with no plugins (no Javascript, no Macromedia Flash). If a site isn't accessible - i.e. the site/ page can't be 'seen' or 'read' by a search engine, then the site/ page can't be indexed by the search engine. Links that can't be seen - can't be followed by the search engine. Many 'cool' web design tools produce content which can not be seen or read - and therefore can not be indexed by search engines. Search engines can't index 'pictures of words'

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well this article is informative and it has helped me a lot to understand the difference between search engine optimization and search engine marketing.

mainly SEM refers to everything paid and free to get the SE traffic which was discussed above. SEO is natural SE traffic from onpage factors such as meta data along with offpage factors such as quantity/quality of links.

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In SEO you will only use those techniques which are free and in SEM you also avails the services which are paid

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You have definitely highlighted a nice point. It is fact that we have to use some paid service while marketing our website.

Nice information

SEM = Search Engine Marketing. It includes seo and paid techniques like paid inclusion and paid placement.

SEO = search engine optimization. optimizing your site for natural listings and directories using meta tags.
SEO is a piece of SEM.Both have the same target to achive maximum traffic for your website.

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