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Maile Ohye: If we are finding links within the Flash, we are actually pushing that back into our crawling pipeline.
So, itís a full integration that really results in the user getting more accurate results and better titles and
descriptions as well.
Eric Enge: So, will a link embedded in Flash pass PageRank?
Maile Ohye: Yes, it functions as a regular link.
She also shares other news and clarifies various other points. For example, Webmaster Tools now will send an acknowledgement message when spam reports are submitted through WMT. It might still be boilerplate, but it's better than falling into a black hole! And she also said that when a DMCA take-down is acted on, the site that is affected will get a notice through Webmaster Tools if they have a verified account.
Check it out - it's worth the read.