SEO stands for Search Engine Optimization, which is a way to reverse-engineer how a Search Engine (Google) works in order to rank higher in the Search Engine Results Page (SERPs).
By having a strong SEO, a website owner can get free organic traffic that otherwise he or she would have to pay for (e.g. via Google PPC Adwords). Easier said than done, ranking on the first page of Google is both a science and an art.
I wrote another post that goes in a little more depth about what SEO is.
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