Brian Ussery posted screen captures of Google possibly adding favorite icons on the left hand side of the display URL in the search results. He posted a screen capture at Google Blogoscoped Forums and emailed me a few.
Here is a screen shot of a site command, which is the only way he was able to see the fav icons, for Matt Cutts' site.
Now, we are not sure if he has some Firefox extension that is making this happen or if it is something Google is testing. Brian is confident he doesn't have an extension on Firefox that would cause this. It also only shows when he does a site:www.domain.com command.
I heard some rumors about this a week or so ago, but passed on it, because I thought it was an extension. So, two reports, within a week - might imply it is a Google test. I cannot personally confirm this.
The images are hosted on Google. For example, if you look at google.com/s2/favicons?domain=seroundtable.com, you will see the favorite icon for this site. But this is used primarily for Google Profile icons. So maybe Google is now using this for search results? I am not sure.
Forum discussion at Google Blogoscoped Forums.
Update: This seems real, John from Google said in a Google Webmaster Help Thread:
We do a ton of tests every year, so I wouldn't be surprised to accidentally stumble across something like this :-).That said, I'd be curious to hear of other changes in the search results pages that you guys would like to see. I don't really have anything to do with that, but it's always neat to see what kind of ideas you all would have. Do you think favicons make sense in search results? Do they help you to recognize a site that you like to go to?
