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Facebook's recently launched commenting system for blogs loads comments in an iframe, instead of loading them inline. Since blog comments can often contribute significantly to the page's SEO, is it a good idea to use Facebook's system on my blog?
Or, does Google recognize iframe content as a part of the page and treats it as such?
(It's noteworthy that Disqus.com does not use iframes and loads all comments inline)
You are correct. The new Facebook comments are loaded in an iframe and will not be indexed and attributed to that page.
Comments are extremely valuable from an SEO perspective since they provide additional text and contain the syntax of users. They can help Google better determine the topic and accelerate keyword clustering which will deliver a wider range of keywords to that page. The latter can be seen when Google creates its own search snippet by finding the query keywords in your comments.
Frames are not search engine friendly especially when loaded by JavaScript which is also not search engine friendly. So I'd say, no, this system is not going to benefit you from a SEO point of view.
FYI, comments don't really help your SEO unless the comments are quality comments that are on topic and uses keywords you want to rank well for. Otherwise the comments in and of themselves have no SEO value.
