The major search engines of today started in the 1990s with the Yahoo Directory starting in 1994, LookSmart in 1995, Alta Vista in 1995, Ask Jeeves in 1997 and Google launching in 1998. Businesses quickly realised the economic benefit of having a top ranked site and began to engineer ways to improve their site ranking and improve site traffic. Very quickly search engine optimisation became a multimillion-dollar industry.
Methods of seeding websites quickly developed with many businesses striving purely to increase site traffic with the belief that more site traffic equals more sales; whereas search engines aim to provide the most relevant sites to a users search. Effective search engine optimisation is improving site traffic for relevant searches only thus ensuring conversion rates are high and bounce rates are low. This will improve sales and keep search engines happy.
In the early days SEO companies had huge success by have keywords in the URLS, page titles, and meta tags with the search engines believing the indicators would return correctly seeded results.
Search engine algorithms progressed and keyword densities and inbound traffic became important. The idea being that a site with repeating keywords and a popular site will return more relevant search result. As this method became abused, so the search engine algorithms evolved and became extremely sophisticated. Search engines now use over 200 factors to determine page ranking. The main factor being back links.
Successful SEO is achieved by have on onsite SEO and a great, natural looking back link profile. Links should come from authoritative sites, be relevant and be diverse. They should also have a diverse anchor text and have a high number of partial match anchor texts vs. exact match anchor text.