I met with one of my web design clients this evening. This particular client, I had spent some time consulting with in the past of the benefits of owning keyword domains in their industry. Eventually, I helped them purchase several domains related to their products and those names now redirect to their primary site. Particularly beneficial to them was the fact that most were hand regs, so the cost was low.
During the meeting today, the owner of the company asked why the domains don't appear on the first few pages of Google when he does a search on the keyword terms. He wasn't in our prior meetings so he missed our discussion. He had a valid question and a common misinterpretation.
As I explained, the company has, and will continue to, receive type-in traffic from those keyword domain names. But in order to reap SEO benefits, these pages would have to be developed to some extent, which would require an additional investment by the company. This investment, I believe, would quickly pay for itself in the form of increased sales. I'd like to point out that I am not an SEO expert, nor is this a service I sell.
Developing these pages is a decision my client will need to make, but I thought this was a good example to share describing the differences between redirecting a domain and developing one.