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NOTE: Alt Tags are counted by Google (and Bing), but I would be careful over-optimizing them. I’ve seen a lot of websites penalised for over-optimising invisible elements on a page. Don’t do it.
ALT tags are very important and I think a very rewarding area to get right. I always put the main keyword in an ALT once when addressing a page.
Don’t optimise your ALT tags (or rather, attributes) JUST for Google!
Use ALT tags (or rather, ALT Attributes) for descriptive text that helps visitors – and keep them unique where possible, like you do with your titles and meta descriptions.
Don’t obsess. Don’t optimise your ALT tags just for Google – do it for humans, accessibility and usability. If you are interested, I conducted a simple test using ALT attributes to determine how many words I could use in IMAGE ALT text that Google would pick up.
And remember – even if, like me most days, you can’t be bothered with all the image ALT tags on your page, at least, use a blank ALT (or NULL value) so people with screen readers can enjoy your page.
Update 17/11/08 – Picked This Up At SERoundtable about Alt Tags:
JohnMu from Google: alt attribute should be used to describe the image. So if you have an image of a big blue pineapple chair you should use the alt tag that best describes it, which is alt=”big blue pineapple chair.” title attribute should be used when the image is a hyperlink to a specific page. The title attribute should contain information about what will happen when you click on the image. For example, if the image will get larger, it should read something like, title=”View a larger version of the big blue pineapple chair image.”
Barry continues with a quote:
As the Googlebot does not see the images directly, we generally concentrate on the information provided in the “alt” attribute. Feel free to supplement the “alt” attribute with “title” and other attributes if they provide value to your users! So for example, if you have an image of a puppy (these seem popular at the moment ) playing with a ball, you could use something like “My puppy Betsy playing with a bowling ball” as the alt-attribute for the image. If you also have a link around the image, pointing a large version of the same photo, you could use “View this image in high-resolution” as the title attribute for the link.