Google via it's Webmaster Central Blog recently announced its improved ability to index Flash. With this new capability, Google will now be able to index text content from Flash files in SWF format embedded in websites.

However this text content does not include dynamic content wherein Flash loads its content from XML or other sources. Also, images still cannot be indexed by Google, thus, FLV files commonly found in videos from popular sites such as YouTube cannot be indexed. Here's a link to the original post from Google' Blog for more detailed information. 

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