Google declared that Website Speed really matters and they have now included this as one of the 200 signals which affects your rankings on Google. what matt cutts say about it ? read it
The new algorithm is called as “Site Speed” which reflects how much time does a website takes to respond to a web request.
It means If you have faster and relevant website then better are the chances of getting toprankings.
Check it out at Google Application : click speed
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google news