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Im currently looking into redesigning some of the sites im responsible for and during this process im looking into the possibility of using flash for on my site (in menus mainly).
Some search engines, have the technology to read flash, so it is not exactly tru that they don't like it...
But no matter if the engine can or can not read your flash files, you can write the words in your page linking the pages inside the flash menu with the link tag in the head of the page
<link rel="next" href="next_page.htm" />
<link rel="next" href="some_folder/next_page.htm" />
This kind of lines works in many ways, but two of this ways are, fast loand of the manetioned page because of preload the page and link is so engines can index it.
About the preload feature, well it is not used or supported in every navigator, but it is in some, basically the gecko brosers...
Hope it helps
Which would those be?
Didn't AlltheWeb.com announce at one point that it had made progress in being able to index Flash content? This was well before the Yahoo purchase, and I never heard much more about it after that first announcement.
Anyway, to reply to the original question: Flash is very search engine un-friendly. Would definitely not recommend it for your site navigation, although it might be appropriate for other elements of a web site.
Flash is mostly a graphics program. Spiders do not have eyes, and as far as I know can not "see" graphics. Even the catalog of G's images are based on what G finds around the image, the image name and links to the image. I suspect that the cataloged flash files are the same.
You could obfuscate the code but that wouldn't help with the search engines even if they could pick it apart. And there would be no point dropping a thousand keywords into the files because there would be no way to tell how much of the text would be visible since it is a graphic file format. Don't expect too much from search engines because it would be too easy to hide text.