According to Google, it does not matter whether you use a keyword in your domain or not.
In September 2012 Google rolled out an update. Matt Cutts tweeted about it.
After this update was rolled out:
High Position’s study indicated that the “average EMD ranking went from #13.4 down to #26.6,” and the “average top 10 EMD went from #3.2 down to #11.9.”
SEOmoz data shows that EMD correlation with ranking has dropped from 0.34 in 2010 to 0.18 in 2012.
But wait, keywords in the domain still matter. We do agree that it doesn’t give the amount of boost as it used to give in the year 2010-12.
But here are some examples that are going to blow your mind:
These are some competitive keywords where using a keyword in the domain is ranking them higher.
There are two types of Keyword Domains:
Exact Match Domain: Using your exact targeted keyword in your domain is called as an Exact Match Domain(EMD).
Example: The targeted KW is “buy shoes online”, so the EMD will be http://www.buyshoesonline.com
Partial Match Domain: Using at least one word from your targeted keyword in the domain is called as a Partial Match Domain(PMD).
Example: The targeted KW is “buy furniture online”, so the PMD can be http://www.homefurniture.com
We have written a detailed post & the case study about the use of Exact Match Domains here.