There seems to be a very heated controversy concerning this...suffice it to say it does work. I've seen examples of poorly designed sites with 0% optimization rate #1 consistently in Google & Lycos simply because of the url.
It also seems that the sooner the keyphrase appears in the url carries weight...this would seem to indicate that the purchase of new domains (eg-www.my-keyword-phrase.com) or adding 3rd level domains (eg-www.my-keyword-phrase.mysite.com) would produce better results than subdomains (eg-www.mysite.com/my-keyword-phrase).
My main concern is whether purchasing 50 new domains ($500 investment plus $300 monthly hosting fees) will provide a better return on investment than adding 3rd level domains or subdomains (essentially free). My approach is to use each newly purchased domain or 3rd level domain to host content rich doorway sites which point to my main site.
Any thoughts on this, preferably based on real world experience and not merely conjecture?
All I can say is that it pays to take good care of the root domain if you are doing 3rd level stuff. I also do NOT link to the third level from the main level. Not entirely sure why that appears to work, but it seems to work.
As far as kw's in the domain name. It's a messy situation isn't it? One engine it does work good on and the other it doesn't. I've had nearly the same luck with loading up the filenames and directories (paths) with the kw's as I have with domains named under the kw. Others have a hue and cry the other way.
As for the investment in domain names. I've split them and done BOTH. A well choosen set of domain names could be an asset in and of itself. $500 (or less) is so cheap an investment when considering the big picture, I don't see how you could go wrong.
I was considering it for this domain itself along the lines of domains.webmasterworld.com or altavista.webmasterworld.com, but I've decided against it due to the corporate name there ;)