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Wouldn't it be better/easier to just create a CNAME (alias) record in the domain1.com domain for www.domain1.com and point it to www.domain2.com and then be able to shut down the www.domain1.com website and just be done with it?
If you point your old domain's DNS to the new domain, you can detect requests for the old domain name, and then use a 301-redirect <added> on the new server </added> to the new domain name. This preserves the value of your old incoming links.
HTH,
Jim
<edit> added clarification </edit>
The problem with this though is that the browser (and the search spider) are unaware of the new domain and I would guess therefore the PR would not transfer.
I think I just answered my own question. Use a 301 Permanent Move to preserve PR. Then after a few months when everyone has had a chance to update their links, delete the old website and old domain name.
The reason I say that is because I set up a CNAME alias a few years back. I still have a site sitting out there with a penalty because of that. My understanding is that you cannot do a 301 redirect with the CNAME, it has do be done through IIS.
Once you do set your method of redirection, the first place you should go is here and perform a Server Header Check [searchengineworld.com].
If the server does not return a 301 error or 301 permanently moved response, then it is not done correctly. You also want to make sure that the location is correct (the url you are redirecting to). The Server Header Checker will return something like this...
Server Response: http*//www.domain1.com
Status: HTTP/1.1 301 Error
Location: http*//www.domain2.com
Server: Microsoft-IIS/5.0
Content-Type: text/html
Content-Length: 157
Hey jdMorgan, am I on the right track with the CNAME and alias issue?