Again on Redirects, but slightly different

[RedTruck]

Another redirect question.

A client of mine has a site under the domain of their company name. They've done some SEO to optimize for specific keywords. If they purchase a domain with the same keywords, how can they set things up to get the value from the URL/keyword SEO?

Should they recreate their corporate site under the new domain and 301 the old domain to the new one? (this may not even be possible as they're part of a multi-national conglomerate and might not have a choice in the matter).

Or should they 301 the new domain to the corporate site? And, if they do this, how do they tell Google about the new domain? Can they add the site in Google Webmast Tools and submit a new sitemap?

I'm just not sure on how this process works.

[accomatic]

New domain initially will have no SEO value itself.

If you point existing domain to the new one using 301 redirect, then SEs will pass all the SEO value from old domain to new domain, and exclude old domain from indexes.

You can 301 each page (URL) individually, this makes a lot of sense if your internal pages rank well.

If they 301 new domain to the old one nothing will happen. In fact it tells SEs to disregard the new domain.

[RedTruck]

I realize that the new domain will have no SEO value without the client's site. However, it should contribute a lot when connected to an existing site that has good structure, content, and backlinks. But, is there really no alternative to cannibalizing the existing site? I'd think that would be a huge obstacle for companies wanting to get the SEO benefits of a generic domain name. And what if you want to target multiple keywords? For example, for products in different markets. Are generics only valuable for niche companies?