I've heard that if I create a blog on my website, it will help to improve the ranking of my site.  Should I create a blog for SEO purposes?

Blog pages on your website are no more able to help you achieve higher rankings than any other page of your site.  However, they should mean that you have fresh, unique content thats added to regularly.  Perhaps as often as every day, if not at least once a week?  The search engines like the fresh content, and will gradually become aware of how often it's being updated or added too.  This will cause them to index your website more often, to get that new content.  The same can be said for regular newsletters or articles.  The key is to add new content to your site.

If you allow others to leave comments on your blogs, both the blog posts and comments may also encourage back links.

Forums can also have the same effect, but you must be vigilant to moderate forum posts.

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