According to Matt Cutts, speaking at a recent PubCon, Google will be looking at why exact domain matches rank so well. For example, if you have a site at blue-widgets.com it may rank a bit too well for the keyword phrase [blue widgets].
Don't Google know? ;)
More likely, Matt would not make a concrete statement, one way or the other. "Yes, exact Match domains rank better!", is not something Matt is likely to say.
Secondly, the implication is that exact match domains are a problem.
Why Use Exact Match Domain Names
Exact match domains names, as the name suggests, are domain names that match the search keyword term. i.e. Hotels.com, shoes.net, planetickets.org etc.
Is it a good idea to adopt this strategy for SEO? Ask ten different SEOs and you'll likely get ten different answers.
On the plus side, an exact match may help you target one, specific keyword phrase. Your link text and domain name match up naturally. The domain name will likely be highlighted in Google's search results, thus giving the listing more visibility. There may be ranking advantages, depending on who you ask.
On the negative side, an exact match only "helps" you target one keyword. It may be too generic for wider applications, such as brand building. Exact match domains may be over-hyped, and not worth a premium. There are, after all, many domains ranking #1 that aren't exact match, so it is debatable how much SEO advantage they actually provide, particularly as Google keeps pushing brand.
Is There A Problem With Exact Match Domains?
So why would Matt imply exact match domain names might be a problem?
It is understandable that some in the SEO community - perhaps an SEO working on client sites, or those who don't own any exact match domains and see others ranking above them - would have a vested interest in making a noise about the competition. If webmasters make enough noise about it, then Matt Cutts may feel a need to respond.
The supposed ranking power of exact match is probably a red herring. The problem Google may be hinting at is that exact match may be more likely to be involved with spam, thin affiliate, or other low value content than other types of domains. In other words, it becomes a quality signal.
If that is the case - and I'm not saying it is - then that may be the reason Google would look closer at exact match domains, not the fact that a domain matching a keyword is somehow evil.
Because it isn't.
There is nothing wrong with owning an exact match domain.
Should You Buy Exact Match Domain Names?
Aaron covered this question in an earlier post, Why Exact Match Domains Aren't As Important As Many SEO's Believe.
In summary, it depends.
It comes down to business fundamentals. If you're trying to build a unique brand, and resulting keyword stream, then an exact match domain name will be a hindrance rather than a help. You'll forever be competing with generic search traffic. Keyword domains names aren't particularly memorable.
The premium that an exact-match domain name commands, when sold on the after-market, may not be worth it. You don't need an exact-match domain name to rank well, so the money may be better spent getting a new $10 domain name to rank. Or, alternatively, you could buy an existing site that already ranks well for your keyword, and others, for similar money as an inflated exact match domain.
Finally, if you're competing with a clear market leader, then generic isn't going to help you much. i.e. owning searchengine.com isn't going to make Google lose any sleep. You may also be over-looking an opportunity to differentiate your offering against the market leader in terms of brand. Think Blekko vs searchengine.com.
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