How does Google handle 301's in regards to SERPS? For example I am thinking about buying a relevant competitor's domain/website. If I do it I would most likely just 301 their domain to my site. Would I assume that competitors SERPS? Is this practice viewed as a bad thing in Google's eyes? I remember Matt Cutts saying something about it at Pubcon and he seemed pretty understanding about companies doing this. What are your thoughts/experiences?
The only SEO\Pagerank value that will be redirected over is from the top level domain, all internal pages will not be redirected which means they will not pass on any value.
301 redirect is just to tell G that a page has been permanently moved to some other page. Now the new page will be indexed on its own. No help on SERPs.
So I basically am telling Google that around 7k backlinks are permanently being redirected to my homepage, and if I understand you correctly, this won't help our SERPS? Hmm...Now that I think about it, we changed our business name about 6 months ago and we 301'ed the old domain to our new domain and we kept the exact same SERP. Which happened to be on page 3 or 4.
If you would do only the main url 301 redirect to another domain I would be surprised to see maintaining the serps without any delay. I would expect a drop in SERPs for some time. In theory new url pages will be indexed on their own.