Can a site’s downtime affect its ranking?

Matt's answer:
webmaster: Today’s question comes from Land Lubber in Colorado, who asks, “Last year, one of my client’s webservers went down for over a day. Would this have affected the site’s PageRank at all? Hypothetically, what if this had happened for longer–could it actually drop the site from Google’s Index?” Ok, so Land Lubber’s getting a little fixated on the idea of PageRank and maybe leaving aside rankings. So, again, PageRank only depends on links; it’s the ranking that might be affected. So let’s talk through it a little bit. Your website goes down; what should Google do? Let’s, let’s play the game of “step into Google’s shoes.” We try to crawl a webpage that we’ve able to reach in the past and for whatever reason, it times out or it’s unavailable. How should we respond? Well, if the website’s supposed to come back in 15 minutes you clearly don’t want to drop its search rankings completely. But what if that webserver has just died and that domain is going away and is never coming back? Well clearly, at some point, you wanna drop it from the Index and never show it again. So, what Google tries to do is come up with a reasonable balance between these two extremes. If your website’s only down for a day or so, then we’d like to continue to visit it, see if it stops timing out, see if its back up, and if it is then it’ll immediately show in the search rankings again. If it’s down forever and at some point it looks really bad; it looks stale if we’re still returning that search result. So, we try to find a good balance. If your website is down for a relatively small amount of time– a day or two– then just bringing it back up should mean that it pops right back in the search results or it won’t disappear at all. But at the point where your website is down for several days or a week or a month, then, yeah, we probably are going to drop it from the search results at least until we can fetch again, find it, index it and then return it. So, if you step into the game of “Play the Search Engine,” step into our shoes and try to figure out what to do; it’s impossible to know when a given page disappears, whether it’s gone for good or it’s gone for 20 seconds. And so we try to come up with reasonable sets of heuristics that say, “Ok, if we try to crawl it again and again and again and we finally find it the third time, then maybe we never drop it or we’ll show it again pretty quickly.” Whereas, if it’s gone for a week or more or lots of time, then you probably wanna drop it and it’ll take a little bit more time for it to rank. None of this changes your basic strategy, which is try to keep your website up and try to make sure that it doesn’t go away for long periods of time if you can help it.
by Matt Cutts - Google's Head of Search Quality Team