Speed is quite important, but not too important. I guess using a reliable host, is more important, because it will not time out.
Site speed makes the traffic sticky and also makes it easier and faster for the spiders to crawl your site and append PR to each of the pages of your site. Site speed also is the reason for people bouncing from the front page (known as bounce rate) -- the slower your site, the higher the bounce rate = Your website can't rank well and can't keep its traffic which means no conversion / clicks / whatever adds revenue to your bottom line.
The other issue as stated above is the timing out or the error page issue -- make sure you make custom error pages so as to redirect any error page traffic to the proper pages. The traffic flowing through can also become an issue of security, for if there are any software exploits / site exploits, the traffic can get to sensitive pages and can fully take down your site. There's also a whole area on doing DDOS attacks on sites using the site's own speed against itself.
it's a factor, but exactly how important it is in googles eyes is anyones guess, I would say it is not a prime determining factor, just one of many.
Thanks everyone. To summarise the comments it looks as though it is important in the general sense that if it spoils the quality of the site because of time delays then you will get less visitor time. Which I assume we would all agree with and know Google checks. But no one is saying it's significant part of the algorithm and they have seen benefits from switching to a lightweight CMS or compressing page code to the optimum.
Website loading speed is very important because Slow loading webpage can loose your website traffic as well as business conversion. every one, who have website, would like to get more and more business and business conversion. I think you should do some load balancing test and loading test at your website.
I agree with you pipes.. speed is necessary, this is one of the factor that can help the site to grow and be visited by many visitors or possible be converted to clients..
SIte speed matters for human visitors, I dont think google bot measures a factor like site speed or speed of load, primarily because different people browser loads site at different speeds based on factors like bandwidth congestion, available bandwidth of visitor etc. May be they have set a rule of thumb as to how fast a typical website needs to be, but I dont recall of it ever being mentioned in the pagerank algorithm.
When you have more traffic to your site.. it may slow down speed and ultimately less vistors.. so speed is always a major factor to attract more visitors..
As long as your site doesn't take so long that the page times out, you probably won't notice much of a difference in your Google Rankings. However, it is a good rule of thumb to make sure your site loads no more than 4 seconds, but preferably 1-3 seconds. Any longer, and most visitors will hit the back button unless they're a returning visitor.
Ok, so we all agree loading time is important. Can we get some numbers on the table plz How fast should a site load? or maybe the max time for a site to load? What do you think?
The max should definitely be 4 seconds. Use this site to check your page size: http://websiteoptimization.com/services/analyze/ I would say the loading times (in seconds) are very inaccurate. For example, my site loads in 2 seconds but it says 19 seconds on T1. But this is still a good resource to check your HTTP requests, page size, and file sizes. In general, you probably want a page size under 200-300k.
I don't think pure site access speed would be a problem for google SERP. But if the speed problem is caused by site structure or navigation issues, it might have negative effects, of course.
If your website takes a minute or two to load, the crawler will see that it could possibly be down, and drop your site. I had a website downtime when I was upgrading servers, and it took a couple of days to get back to optimal speed, and I was almost dropped, and literally went from being on page one for my niche, to 19. Your site needs to load fast, in order for you to be able to rank. Thanks,