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[edited by: engine at 5:25 pm (utc) on Mar 25, 2010]
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I outsource most of my web work; development, design, PPC etc.
But I'm reluctant to offer SEO services as I'm not convinced this is a service that can be outsourced cost effectively.
My understanding is that while on-site SEO can be done by an outside company, a big contributing factor is link popularity.
And websites will only link to decent content, which then means your outside agency needs to produce content about a business they know little about, and therefore it fails.
Some of the services quoted by an Indian company for $500 per month included; article content development, article submissions, blog content, 15 one way links per month (PR2+), creating wiki profiles, amongst other things.
I'm sure SEO companies can get links to my website but the links will be worthless.
My advise to small companies with limited budget is to do it themselves, i.e. they need to have an internal content generating strategy; blog, news etc and request links from relevant websites. Would you agree?