Google is often tight-lipped about its ranking signals. It makes sense, as they don't want you to be able to game the results and get your content to rank when it shouldn't. That's why it is still somewhat surprising that Google decided to start putting out these monthly lists of algorithm changes, such as the one for April they released late on Friday.
While Google does provide us with all these changes it makes (not ALL of the changes it makes, surely - it makes over 500 a year), Google also tends to send mixed signals, telling users not to focus on the SEO trends. Trends must start when signals are discovered, so it seems odd for Google to release these lists, but the company has indicated it is an effort to be more transparent, without giving away the secret sauce in its entirety.
But if you look at a signal like this one, they're clearly not giving much away, even though they're telling you changes have been made with regards to this particular signal:
Improvements to how search terms are scored in ranking. [launch codename "Bi02sw41"] One of the most fundamental signals used in search is whether and how your search terms appear on the pages you’re searching. This change improves the way those terms are scored.
So, from this, we know that Google has changed how it scores key phrases. They don't say whether they have a greater or smaller impact on how content ranks, though I'd be inclined to speculate that it's smaller.
Google is always talking about how it is getting better at understanding content, so it seems unlikely that the algorithm would have to rely on search terms more for ranking. As Google says, this is one of the most fundamental signals used in search. It's always been an obvious signal. It seems like it would be a step backwards if search terms appearing on a page had a greater impact. That would go against that whole SEO mattering less message Google has been sending lately (particularly with the Penguin update). It doesn't get anymore SEO than keywords.
In the last paragraph of Google's announcement of the Penguin update, Matt Cutts wrote, "We want people doing white hat search engine optimization (or even no search engine optimization at all) to be free to focus on creating amazing, compelling web sites." Emphasis added.
For that matter, keyword stuffing, a classic black hat SEO technique was one of the focal points of the Penguin update. This would effectively render keywords less significant in that regard. On that note, there's another change on the new list related to keyword stuffing:
Keyword stuffing classifier improvement. [project codename "Spam"] We have classifiers designed to detect when a website is keyword stuffing. This change made the keyword stuffing classifier better.
There's another entry on Google's new list of changes, which would also seem to support the theory of a lessened weight on keywords:
Improvements to local navigational searches. [launch codename "onebar-l"] For searches that include location terms, e.g. [dunston mint seattle] or [Vaso Azzurro Restaurant 94043], we are more likely to rank the local navigational homepages in the top position, even in cases where the navigational page does not mention the location. Emphasis added.
Google is saying outright that it's going to return results that don't have the exact search terms the user used. Plus, the Bi02sw41 entry appears directly after that on the list.
There's another entry, which could be related. It's certainly noteworthy either way:
Better query interpretation. This launch helps us better interpret the likely intention of your search query as suggested by your last few searches.
This is the type of thing that could very well cause Google to rely less on exact key phrases.
I wouldn't advise that you stop using keywords in your content, and I've yet to see any real evidence that Google isn't relying on my exact queries to return results. Keywords obviously still matter a great deal - just maybe not quite to the extent that they used to.
Even Google itself, in a recent list of SEO DOs and DON'Ts said: "Include relevant words in your copy: Try to put yourself in the shoes of searchers. What would they query to find you? Your name/business name, location, products, etc., are important. It’s also helpful to use the same terms in your site that your users might type (e.g., you might be a trained “flower designer” but most searchers might type [florist]), and to answer the questions they might have (e.g., store hours, product specs, reviews). It helps to know your customers."
So, again, I'm not in any way saying keywords don't matter. They do. Honestly, I'm not really sure what you're supposed to do with the information in this article, but if Google is giving any less weight to keywords, it's worth knowing about.