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Both SEO and SEM are both broad terms and they encompass lots of things. Basically though, as most people state here, SEO or search engine optimization stems from SEM or search engine marketing, whether it is paid or not. If you want to market your website to the available search engines, then you would have to make use of SEO tactics to be able to go forward. It is, however, true that you could get more our of paid SEM tactics. These include inclusion in search engine listings.
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