Is the size of a website a ranking factor?
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Hi Fothe, no, it is not an old wives tale, increasing the number of pages can boost your rankings IF the pages you are adding are in fact quality content that is well optimized, if you start uploading any low quality or scraped content just to increase the number of pages, you will probably get in trouble or penalized.
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True, but if the site is powerfull and inner pages are getting links directly and inner pages are linking to other pages (index and other inner pages) the rank will grow.
I don't think it's a direct signal with google (the # of pages that is) for ranking but having a lot of pages dose help with ranking too since the # of links will grow - even if those links are internal links. (not only with a wide exposure and higher traffic)
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I have seen a lot of large websites ranking in competitive areas and I belive the size of a website have its influence in ranking factor.
I am not saying the bigger the site the better it ranks, but having the right site architecture (helps Google crawl the site), having unique and useful content (to get quality links and not being a content farm) and also interlinking the pages all contribute to the ranking factor. And having a bigsite definitely helps

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Don't think that's an entirely accurate (or at least, not comprehensive) explanation of PageRank. Simply generating more pages on a site regardless of their ability to generate external links, is likely a way to dilute the site's ability to be crawled/indexed/ranked over time. See http://www.seomoz.org/blog/how-pagerank-works-why-the-original-pr-formula-may-be-flawed and http://www.seomoz.org/blog/google-says-yes-you-can-still-sculpt-pagerank-no-you-cant-do-it-with-nofollow for more.