An article by MediaWeek named Search-Specific Agencies Fight for Survival has sparked a heated and passionate debate over at Search Engine Watch forums, under the thread title Will SEM exist 3 years from now?.
The article has some strong statements; such as “As technology improves, the need for optimization will go away,” MacDonald said. “Their business won’t exist in three years.” Now a statement like that, discussed in an SEM forum, will of course get some feedback. The beauty of the thread is that it was started by an non-SEM, an outsider to the industry. As for me, I don't really have the "SEM view point" because I run a pure technology company. So let me pull out some interesting rebuttals and you can check out the thread for more.
I certainly agree that many SEOs will eventually get weeded out. It happened a few years ago and it will undoubtedly happen again. Only the strong survive in anything.
There is going to be a need for SEOs as long as people use some sort of "information search".
There are going to be fewer mid-sized SEO/SEM companies around in 2-3 years.
SEMAs margins come down, consolidation is inevitable in any business.
Now those are just the first few posts, many more goodies in the thread. Also check out Danny Sullivan's SEMs: Your Days Are Over (Not) blog entry.