Blogs are great for Search Engine Optimization. The way a search engine considers it is basically this:
1) Google says, “Ahhh… these guys keep updating their website with fresh content. This isn’t a stagnant, dead website. These guys are putting effort into this… it’s probably worth a look!”
2) Google says, “This website is posting new material, it must be timely and relevant to the times.”
3) Google says, “Look at ALL THE POSTS on this website! These guys must be authorities on their subject!” (Google likes websites with a bunch of pages and lots of content.)
4) Google says, “Look at all the times this website mentions ‘your-keywords-here’. This site must be the real deal… this site really is talking about what our visitors are wanting to read about!”
5) And let’s not forget the “long tail”. Blogs enable you the freedom to talk about things that your standard webpage would never, otherwise, cover. For example, if you are selling cell phones you are going to have very generalized (and very competitive) pages (such as Brand, Type, etc.) and keywords; however, if you have a blog, you could also then write posts about the dangers of using your cell phone while driving or horror stories of losing a cell phone on vacation. The benefit is this: there are millions of websites out there marketing Motorola Cell Phones (and tons of traffic to be had if you rank well for that keyword phrase!), but there are more limited numbers of websites out there that discuss the dangers of using a Motorola while driving… and much less traffic, but there is still traffic from this niche keyword phrase! If you blog on niche topics that remain consistent to your website’s purpose, over time you will begin collecting the dividends of the “long tail”.
Of course, to Google we could also add Bing… and every other search engine that “crawls” your site to index information about it.