Keyword use in the domain name has been a hot issue for a while now; there’s an ongoing debate as to whether it is an important ranking factor in Google. I can remember that SEO experts used to say that it is NOT actually the keyword use in the domain name which is contributing to rankings. Rather, since there is a high probability that hyperlinks will use the domain name as the anchor text, keyword use in the domain name leads directly to lots of inbound links that use the keyword in the anchor text. Keyword use in the anchor text is the most important ranking factor in Google according to the latest survey conducted by SEOMoz.
For example, in high quality directories or other websites, many webmasters and even bloggers still prefer to link to the domain using the domain name, like this:
<a href=”http://www.seochat.com”>http://www.seochat.com</a>
The hyperlink anchor text for the above link would look like this: http://www.seochat.com
This contains the important keyword “SEO.” It will be interesting to examine the probability of ranking pages in Google containing keywords in the domain name. When we have the data, we will learn whether or not the expert opinions are true.
We will employ the following test:
Step 1: Select 10 competitive (two-word) key phrases.
Step 2: Count the number of results in the Google top 20 containing at least one word matching the targeted keywords in the domain name.
For example, if the targeted keyword is mobile phones and one of the search results has a domain name: www.mobileburn.com , then it contains at least the word “mobile” in the domain. That counts (Google even bolded it in the search results).
Step 3: Count the number of results containing an exact match of the targeted search term in the domain name. For example, if the search query is “commercial mortgage,” then the domain name www.commercialmortgage.net is an exact match.
Step 4: Assign scoring. If it’s not an exact match, the count is 1. For an exact match, we will assume it to be three times as effective. This is only a rough guide, though it might be valued even more by Google.
Source: http://www.seochat.com