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SEO is the act of optimizing a website for organic or natural search engine listings. Search engine marketing (SEM) is the process of marketing a website via Internet search engines
SEO (Search Engine Optimization) is the process of targeting different set of keywords and ranking for them on top of SERPs organically.
wherein, in SEM (Search Engine Marketing) we obtain rankings by paying certain amount of money to the search engines, SEM is also known as Non-Organic Search.
SEO stands for Search Engine Optimization, the art of promoting your webpage to the top of the search results in Google predominantly, but also other search engines such as Yahoo.
whereas, SEM stands for Search Engine Marketing worked under Paid Ad's which placed under Google, Bing, MSN as AD's with specific keywords and also known as Non-Organic Search.
SEO is the process of optimizing your web site for the purpose of getting free traffic from search engines.
SEM is the marketing process with a goal of getting more visibility in search engines either by getting more free traffic (SEO) or paid traffic (Paid search advertising).
The difference between SEO and SEM is simply that Search Engine Optimization is part of Search engine marketing or Search marketing as it is widely known. Both processes aim in increasing visibility in search engines. SEO is about optimizing the web property to get better rankings in the search results while SEM goes beyond SEO. It involves other methods as well which can get you more search engine visitors like PPC advertising.
The phrases SEO (search engine optimization) and SEM (search engine marketing) are similar -- and sometimes used interchangeably, SEO and SEM are different services.
SEO-Search engine optimization
SME - Small and medium size organization
SEO is when you are not paying the search engine.
SEM is when you opay the search engine to show your ads.