Do you buy a domain name which includes your keywords as a strategy to rank high for that keyphrase in search engines?  The following video featuring Matt Cutts sheds some light on the question answering “How would you explain ‘The Power of Keyword Domains’ to someone looking to take a decision of what kind of domain to go for? ”

The main point we can take from this video is that the domain name you choose doesn't necessarily need to contain the keywords you wish to rank high for in search engines. Just look at examples like Techcrunch, Facebook and Wired to know this is correct.

But having said that, you will see examples all over the web which back up the keyphrase domain ranking theory. Here are just a few examples we spotted today: 

Cheap Flights
cheapflights.com rank 1st in google.co.uk

Bar Stools
barstools.co.uk rank 1st in google.co.uk

Leather Sofas
leathersofasonline.co.uk rank 1st in google.co.uk

Sports Cars
rsportscars.com rank 1st in google.co.uk

Day Cream
daycream.net rank 1st in Google.co.uk

Search Engine Optimisation
Another rather appropriate example is to search Google UK for 'search engine optimisation' and look the top 2 results after the Wikipedia entry!

There are of course many examples where keyphrase domains don't rank high for a given keyphrase and often these are found in very competitive niches such as insurance, finance and travel. For example search for car insurance in Google UK and not one result in the top 10 has car insurance in the main domain - but many of them have car insurance within the path for example www.moneysupermarket.com/car-insurance/.

Lots of the examples you see still invest heavily in building their brands as well.

Matt Cutts says that Google’s algorithm has been adjusted to remove the weight given to favour keyphrase match domains (see from 2 mins 22 secs in the above video) but we are clearly seeing websites ranking high in Google with keyphrase domains.

Let's look at the main ranking factor for search engines which still to this day is links and which is why link building is still as important as ever. The very nature of a keyphrase rich domain name means that sites linking to them will more often than not use the domain name as the link text so straight away with little effort they will gain anchor rich text links. So you could say that those with keyphrase match domains have a head start over its competitors who don't have a keyphrase match domain and those with domains that don't contain keyphrases require more effort in their seo and link building campaigns, especially those in competitive niches.

The strategy for keyword rich domains works far more successfully in less competitive markets which aren't dominated by brand advertisers. In fact, if you look at the actual top websites on the web you'll see that practically none uses keyphrase rich domains.

Keyphrase rich domains are still evidently very powerful in rankings but search engines are constantly looking at other ranking factors such as site speed, social signals, usability, outgoing links, branding etc. For years, exact match domains for example SEO.com for the query 'SEO' have been the best bet to rank quickly and stay on top. However, if what Matt Cutts says is true in the above video and we've no reason to believe otherwise, the domain match keyphrase is no longer as important as it used to be. Branding is getting more and more important and even an exact match generic keyword domain is no guarantee of ranking these days.

From a fundamental business angle, the flaw with keyphrase rich domains is that they cause problems with consumer recall of the brand identity and therefore once the business reaches a certain size, they actually become negative:

1. from a trademark perspective they are potentially difficult to protect.

2. it's harder for consumers to distinguish between the site names if every-ones looks the same.

3. the business becomes pigeon holed by it's name so has less flexibility about which markets it can target.

Focusing on brand and brand mentions socially + other ranking factors is far more likely to result in higher rankings in more competitive niches than the purchase of a keyphrase domain name which you probably can't afford anyway. For websites in less competitive niches, using a keyphrase rich domain strategy should pay dividends but if you are a business with a brand, forget the keyphrase rich domain strategy and invest the money into building your brand.

Conclusion

So the question "do you buy a domain name for your website that includes your keywords as a strategy to rank high for that keyphrase in search engines?" the answer would be a hesitant yes but only if you can buy an exact match keyphrase domain, you're not in a competitive niche and want to stay in that niche. Afterall, it's virtually impossible to buy a keyphrase match domain name for a competitive search term unless you want to shed out serious money. However if you want broader on and offline appeal and want to target a lot of markets think of a brand lead approach.