Matt Cutts, a senior engineer at Google, endorses niche marketing. In a post that tries to enlight web publishers on how to be resourceful and its relation to being a good SEO, he explained that carefully choosing keywords, blog categories and keyword variations are important, but it ends there.

Writing good and on-demand article is what matters. The techniques mentioned above are just ways to get noticed by the search engines.

What’s more interesting is that Matt mentioned about niche marketing in the process. He suggested against starting in the porn, pills, casinos, mortgages, and I assume others competitive niche markets. Instead, it is better to start with a smaller niche.

If you become known as an expert on (say) configuring Linux or hacking gadgets, you could build that out with things like forums to create even more useful content. Look for a progression of niches so that you start out small or very specific, but you can build your way up to a big, important area over time.

There are a lot of niches that just take sweat equity. You could be the SEO that does interviews. Or the SEO that transcribes Matt’s videos. Or the SEO that makes funny lists. Or the SEO company that provides webmaster radio. Or the SEO that makes podcasting easy. Or the SEO that specializes in a certain content management system or shopping cart. Or the SEO company that specializes in Yahoo! stores. Or the SEO that specializes in accessibility. Or the company that mocks Silicon Valley and its companies. Or the SEO that specializes in AdWords API ROI tracking. Or you could be the SEOs that write-up a summary of every panel at every search engine conference. Or the company that does cartoons. Or the SEO who pays attention to Google Base, Google Co-op, Yahoo! Answers, or Facebook. Or the SEO that provides Firefox plugins. Or the company that provides metrics and tracking for blogs. Or the SEO that talks about patents. Or the SEO that specializes in dynamic sites. Eye-tracking. Beginner SEO tutorials. Making maps mash-ups. Ajax SEO. SEO for non-profits. SEO for Second Life or MySpace. SEO to repair a company’s reputation. SEO for MySQL, Python, Ruby on Rails, WordPress blogs, or .NET sites. The SEO that surfaces databases or Flash sites. SEO for self-publishing authors. The SEO that does radio ads.

Another sound advice is to ask yoruself where you want to be, and see if you can find a path from a tiny specific niche to a slightly bigger niche and so on.

Take a read of the blog post.