Matt Cutts first mentioned speed publicly, as a potential ranking signal in November 2009 but, speed has always been important at Google. Google's homepage for example, is intentionally sparse so that it loads quickly. Larry Page recently said he wants to see pages "flip" online. Clearly the concept of speed and it's importance at Google is nothing new. Robert Miller, actually conducted the first research in this area over 40 years ago. According to Miller, when a computer takes more than one tenth of a second to load, the user feels less and less in control. When Google and Bing conducted their own tests in 2008 the results were similar to what Miller had predicted. Bing experienced a 1.8% reduction in queries when slowed by 2.0 seconds and Google experienced a 0.59% reduction in queries when slowed by 400 milliseconds. Bottom line, fast pages help marketers because users are far less likely abandon fast loading sites. Users expect pages to load quickly!
Page Speed was introduced as a ranking signal for English queries executed via Google.com nearly a month ago. It's defined as "the total time from the moment the user clicks on a link to your page until the time the entire page is loaded and displayed in a browser." In their first major update to Webmaster Guidelines in over a year, Google recommends webmasters monitor site performance and optimize page load times on a regular basis.
Because Page Speed data is missing from Analytics and other tools, it's best to use the Site Performance in Google Webmaster Tools for regular monitoring and optimization. To view Site Performance data in Google Webmaster Tools, you'll need to add and verify your site first. In Google Webmaster Tools, Site Performance data is processed in aggregate and without personally identifiable information. "Example" URLs are derived from actual Google Toolbar user queries and as a result query parameters are removed. "Suggestions" are based on URLs crawled by Google and not truncated. "Average" site load times are weighted on traffic. Site Performance data accuracy is based on the total number of data points, which can range from 1-100 data points (low) up to 1,000+ data points (high). As mentioned earlier, this data comes from Google Toolbar users with the PageRank feature enabled. While Google hasn't provided Toolbar PageRank user demographic information, this data seems fairly reliable. If anything, it would seem that Toolbar PageRank bias would point to more savvy users and that as a result Google Webmaster Tools Site Performance data might be faster than actual.
During our "Speed" session at SMX, Vanessa Fox and Maile Ohye (Google) seemed to agree that less than 4.0 seconds was a good rule of thumb but still slow. According to Google AdWords, "the threshold for a 'slow-loading' landing page is the regional average plus three seconds." No matter how you slice it, this concept is fairly complex. Page Speed involves code, imagery, assets and a lot more not to mention user perceptions about time. For example, the user's internet connection (Google Fiber), their browser (Chrome), device(Nexus One), its processor (Snapdragon), the site's host and other issues all impact user perceptions about speed. Don't worry though, according to most expert estimates, 80% to 90% of page response time is spent on the front-end. At the end of the day, relevance is critical but speed follows quickly behind.