404′s otherwise known as Page Not Found errors can have a serious effect on your SEO efforts. Google have provided a little widget that may help resolve some of these errors while also helping your visitors.
Often a URL will get damaged in transit so a 404 error is returned instead. If the user is impatient they are just as likely to hit the back button or try a different site. This widget helps the visitor find the right page, make suggestions for appropriate pages on your site, or use the search box to find what they are looking for.
There are various ways to help your visitors get out of the dead-end situation. In our quest to make 404 pages more useful, we’ve just added a section in Webmaster Tools called “Enhance 404 pages”. If you’ve created a custom 404 page this allows you to embed a widget in your 404 page that helps your visitors find what they’re looking for by providing suggestions based on the incorrect URL.
If you know what you are doing, or have a good web designer, then having a custom 404 page is the best option. Having employed a strong SEO campaign the last thing you need is to have your visitor leaving your site.
The Google option is good attempt at trying to provide one solution for the 404 error and is better than no page at all. Optimizing for any 404 errors should be an essential part of any search engine optimization campaign. There is a use for both.