What is LSI? First patented in 1988, LSI was first incorporated into Google's ranking system in 2006. The LSI concept is groundbreaking for search engine marketing and web site marketing strategies because it changes the way a search engine interprets and ranks webpages. With the old ranking system, relevant pages were determined by keywords and keyword phrases alone.
If the search engine didn't find any keywords, the page was considered irrelevant to the user, and ranked accordingly. This left many webmasters scrambling to jam their pages with keywords for increased web site traffic. These web site marketing strategies left something to be desired, and were unfair to webmasters who had good, relevant content.
LSI actually allows the search engine to examine a web page as a whole, looking for not only keywords, but also for words that are semantically close to keywords and keyword phrases. I think this is GREAT and long over-due. Changing your website marketing strategies, LSI significantly changes the way we need to use search engine marketing for increased traffic, because the SE's will be looking at a page in the same way a human does—concentrating on content and relevancy, and essentially classifying the web page as a whole. This is very exciting really.
For webmasters who use website marketing strategies that rely heavily on pages that incorporate only one keyword or keyword phrase, and don't include other content; that is semantically close and relevant, this could be a problem, and may result in a lot less traffic to your site.
Webmasters, who on the other hand, have developed web pages and web site marketing strategies that rely on natural content that incorporate both keywords and keyword alternatives, should have no problem. They will see increased web site traffic without having to change their search engine marketing techniques.
If you are wondering how you can implement web site marketing strategies that achieve increased web site traffic and are more compatible with LSI, you should focus on creating quality content that includes keywords, keyword alternatives, and mixed anchor text. This must include variation and words that relate to the general theme of a page which will be the best technique you can employ now that the rules of SE marketing game have changed.
The key is to move forward and not get frustrated with the change. LSI is a positive step for search engines and webmasters. By tweaking your web site marketing strategies to compliment the changes, you can create a better website and get the increase in website traffic that you need to be a success. No traffic = no success.
And that is, in a nutshell, what LSI is.