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I can see the usability benefits, not least when it tells the user the obscure phrase they searched for is found in the third article down the page.

Unless the website is designed to be readable as a scaled down .jpeg and/or the entire useful content of a page is encapsulated in the single paragraph Google chooses to highlight I don't think it's a massive loss for webmasters. If sites have to look halfway decent to get decent click throughs it could be a godsend for designers though.

The implementation is pretty ugly...

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