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This does seem to post a problem for SEO. Obviously on site everything wants to be spelt and punctuated properly, anything else looks amateurish. But when searching a majority of people don't bother with punctuation and are much more likely to just bash in childrens rather than children's, which means that sites who optimise for childrens will be ranked higher then those who punctuate words properly. I'd give a comparison on how many people use apostrophes when searching but infuriatingly Google Insights doesn't take apostrophes into account.

Thanks for your help in tracking this down!