The process of picking the best URL when there are several choices; this usually refers to home pages. (Source: Matt Cutts Blog: SEO Advice.) In addition Canonicalization is the process of converting data that has more than one possible representation into a “standard” canonical representation. This can be done to compare different representations for equivalence to count the number of distinct data structures (e.g. in combinatorics) to improve the efficiency of various algorithms by eliminating repeated calculations or to make it possible to impose a meaningful sorting order. (Source: Wikipedia)
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