I did a search for "search engine optimization" and I noticed that in the results, the term "SEO" was also highlighted, making it look like Google was aware that the terms were the same. It also does the same thing with "USA" when you search for "United States of America". But, If I do a search for "SEO" vs. "search engine optimization" the results it pulls up are very different result set, suggesting that Google is only doing highlighting of the terms, not actual ranking of results based on the acronym. Also, doing a search for "WWF" highlights both "World Wildlife Fund" and "World Wrestling Federation" One final thing I tried was searching for "theatre" and "theater", and Google did not highlight one when searching for the other, suggesting that for alternative spelling it is not doing the same thing it does with acronyms. So, what is going on here. Will having the term SEO help you rank for "Search Engine Optimization"? Or is this just strictly something Google shows in the results page?
I think SEO will help rank for search engine optimization. Check this one out: SEM Bring up the acronyms..including "Search Engine Marketing" ..there's an untapped keyword.
Google takes much more than acronyms into account. Play with it a little, you'll be surprised how well it reads intentions.
Google is smart, besides you said, if you search tutorials, pages with tutorial will be highlighted also. But it's not as smart as human beings, because if you search tutorial, tutorials will not be highlighted.
Spelling variations are not taken into account. Google does actual geotargeting on those. So if you search theatre in the USA it will push up sites that use theater, because those are more local. Vice versa in the UK.