Essentially Google state that they are “including a new signal in our search ranking algorithms: site speed. Site speed reflects how quickly a website responds to web requests.”
Google consider the load speed of you website a vital element of a good user experience and therefore measure your website’s speed as part of its ranking criteria (essentially an equally built website (in terms of content) may rank higher if it loads more quickly than yours)
Page load speed is typically influenced by 2 factors:
The physical data size of your pages – number of images influence this massively
Your server capability – an old slow server will mean your site will load slowly
Google suggest using one of the following tools to check your website’s speed:
Page Speed, an open source Firefox/Firebug add-on that evaluates the performance of web pages and gives suggestions for improvement.
YSlow, a free tool from Yahoo! that suggests ways to improve website speed.
WebPagetest shows a waterfall view of your pages’ load performance plus an optimization checklist.
In Webmaster Tools, Labs > Site Performance shows the speed of your website as experienced by users around the world.