Think of a search engine as a person browsing your site who doesn't have Flash installed on their computer. If your web site utilizes Flash, would that person be able to read anything on your site? Would they be able to navigate around? Would they see anything at all? Would they be able to figure out what your company does and get the information that they need?
Search engines send out spiders to crawl web sites and collect information. These spiders read a site and determine what that site is about and how it should rank in search engine listing pages. These spiders can not read Flash files. That means that if you have a 100% Flash site, spiders don't see anything.
Flash is basically a movie. There is no way for a search engine to see what's in the movie or read the text in a Flash web site because it's just a sequence of still frames - a movie. Spiders also cannot follow site navigation if it's flash based. Have you ever been to a web site that has a Flash intro movie that you have to sit through and then when it's done click 'Enter Site'? Well spiders can't even get past this page.
If you have a site that is 100% Flash, your odds of ever ranking well in a search engine are pretty low. A site re-design or a paid search campaign might be worth considering at this point.
Flash can be a very powerful tool. It can make a web site much more interactive than a HTML web site. It can provide animation and rich media that HTML can not provide. The use of Flash on a web site is not a bad thing at all if used correctly.
The best web sites with Flash on them, are the ones that incorporate elements of Flash into a HTML based web site. A web site could have a Flash slide show of images in the banner or a Flash based video available for viewing but the text of the site would still be HTML text so that spiders (and even those few visitors who may not have Flash installed) are able to see the main content of your site.
A site with Flash based navigation (a menu bar) can do some really cool things that a HTML or javascript based navigation can't do. But, like I said earlier, spiders can't follow Flash navigation. There is a simple fix to this problem and that is to create a text based site map that has links to every page of the site. Once spiders find this page, they are able to access every page that it links to. Also, placing simple text based navigation in the footer of a site (like this one has) is a very good idea for spiders and for those who may not have Flash installed. Doing this allows you to utilize the complex animations of Flash in your navigation while still keeping your whole site accessible to spiders.
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Think of a search engine as a person browsing your site who doesn't have Flash installed on their computer. If your web site utilizes Flash, would that person be able to read anything on your site? Would they be able to navigate around? Would they see anything at all? Would they be able to figure out what your company does and get the information that they need? 