1script - 7:01 pm on Apr 9, 2010 (gmt 0)
I think here we have another one of those FUD factors Google peeps like to throw around to cloud the waters and distract SEO-aware crowd from the real ranking factors.
Speed is part of the algo now
There is no one such thing as "site speed". There are at least several "speeds" I can count on any one of my sites: there is a speed with which a static HTML page is served (VERY fast), then there is speed with which a "static" content from a database is served (like individual post pages on a forum site, less fast), then there is the speed with which changing dynamic content is served - think forum category pages, then there is a VERY slow (all relative terms of course) text search speed. Which one is more important for Google? How would you even calculate the "average" they show in WMT. BTW, what they show is completely bogus, at least for my sites. What if a great site is hosted on a shared server and somebody else hogs resources?
If you say the faster the site the better it means: "I prefer static HTML sites on dedicated servers." If you are on a mission to organize the worlds information, that doesn't take you very far. The description above probably only matches some old government sites out there.
I'm not saying "site speed" (however you define the term) is not a ranking factor - I don't know. But if it is, it must be the one than makes least sense of them all.