There's a lot of myths being thrown out in this thread, so I thought I should try to clear the confusion...
its certainly not as big of a factor as it was before googles 'panda' update
Incorrect - the Panda update didn't focus on keyword domains, it targeted low quality sites with useless content. If your sites suffered, it isn't because of the domain.
What I tend to see as a pattern is that domain age and backlinks gets them onto the first page.
Domain "age" hasn't mattered ever since Google became a registrar (SEVERAL years ago). For some reason, a high majority of Domainers still think this is a good way to assign a value to a domain - and it's complete nonsense! Whenever a domain gets transferred to a new owner - Google knows it. The domain's "age" starts over.
Think about it this way - if you hand register a domain today (2011) that someone registered back in 1995 but let expire a few years later, do you think you now own a domain that is 16 years old? Of course not.
It doesn't matter if you purchased a domain that has expired, dropped, or was transferred via acquisition - once Google knows there's a new owner they hit the reset button.
I think the reason people believe a domain's age has value is simply because they're confusing "age" with "trust". Everyone has heard of Google's PageRank algo - but not everyone knows about TrustRank. Basically, your website's reputation is created over time. Google follows your site's progression and actions over time and assigns you a "trust" rating. The more they trust you, the higher you rank. This is why Amazon can rank
#1 for the most competitive keywords while having duplicate content and an impossible-to-index site architecture, but XYZSite.com wouldn't get past the 50th page.
TrustRank = Reputation over Time
Domain Age = Amount of Time a Domain has been Owned
Domain Age by itself means absolutely nothing...and both the TrustRank & Age get reset once a domain gets transferred to a new owner.
For those that are just dying to argue something like: "
Well, what if Amazon sells their company & domain - Are you saying they would get reset!?!"
Nope. There are definitely ways to maintain but it would take me way too long to explain. The quickest way for me to answer is this: If Amazon got acquired, the new owner
wouldn't suddenly change the entire site and turn them into a comic book store.
They would still be the same company, and therefore would be able to keep all the relevancy they had from before.
In any case - back to the original question about keywords in a domain...
They help.
How much? No idea.
Impact/Benefits will depend on the competition for the keyword.
I do know that to get ranked in Bing/Yahoo having the keyword in the domain is extremely helpful. As for Google...they are REALLY good at identifying & applying other relevancy signals for determining rankings.
Assuming everything else is equal - having the keyword in the domain will tip the scales in your favor.
Hope that helps!
-Midgetlov