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...and mind you, I'm often in positions 1 + 2 for many of my keywords, so I'd be the first to lose if they took it away; I'm not motivated by self-interest here. The serps are cluttered with zillions of repetitive same-site results.
Certainly we're all savvy enough to navigate any site once we get there. Google's job is to let us know which sites exist, and lead us to a single starting point for each. They don't have to point out every freaking page of each site (I'm exaggerating for effect, but anyway) it's so utterly pointless and such a terrible waste of ranking positions, which should be as precious to Google as they are to everyone else who uses or benefits from them.
Google may agree with this, and in trying to provide a more user friendly service, they helpfully list two relevant pages if they can.
Recently I have noticed that people searching will read the snippets more carefully. This may have developed from the experience of clicking sites and then not being able to find information because of complicated navigation or they have visited a site only to find (after waiting ages for the page to load) that it is not quite relevant. To avoid this they tend to scroll down the results until they see the exact snippet or title they are looking for, in the knowledge that this site is probably applicable for their quest and will be worth the wait to load.
Accordingly, I suspect the average user now takes more time to analyse results and will often scroll further down to find a relevant site, seeking exact matches to their search term.
I wonder if the time has come whereby a more user friendly title/snippet which may not rank as well is in fact a better strategy which will provide higher quality visitors? The percentage of people just blindly clicking the top results may be diminishing, with lower ranking sites picking up more traffic if their title/snippet is more appealing.
Google users may be becoming more discerning and spending more time examining google results.
However, some users still seem to be confused about what indenting means when they see it in the results. This is mainly due to seemingly inconsistent behavior of this feature: some times results from same site are collapsed and some times not. Results are usually collapsed when they are from the same site and appear in succession. Despite the user confusion regarding this feature, we have adopted this convention, along with many other engines. We believe this provides a cleaner SERP and hence a better overall navigational experience to the user.
2A) Welcome Kaushal Kurapati - it's good to have an Ask Jeeves / Teoma representative in these forums.
Now ... I have a few more questions about Google .... :))
2B) I vote for Teoma as a far more relevant SE than the present MSN Search.