1. Case of a well known company with high reputation
If you're interviewed for a vacancy in Google Inc. or other company with very high reputation, you're really expected to answer exactly why you've selected this company rather than another one. If you want to work at Apple or Facebook, you want to do it for a specific reason, not just for money or because you don't have any other choice.
For example, if one day I will send my candidature to Fog Creek, I expect them to ask me this question, and if they do, I'll explain that I'm looking precisely for a job in Fog Creek:
- because I enjoy the people who work there,
- because I totally agree with many things written by Joel Spolsky of Jeff Atwood (even if Jeff left the company now),
- because I truly believe that their management techniques are the right ones,
- because the score on Joel test is 12/12, and not 2 or 3 like in most companies, and
- because I know that I'll spend my time doing development and increasing my productivity, instead of fighting people from human resources department, or the boss, or the lead developer who doesn't know anything about the software development but who is still where he is because he's the brother of the boss.
2. Case of an ordinary company, not known or with no specific reputation
If you're interviewed for a vacancy at "just another company" which has nothing special nor great, you will still be asked the same question, but the expectation is not the same. Here, you're not expected to tell that this is the greatest company and you spent your college years dreaming to work here: they know it's a lie and they are among hundred of other candidatures you've sent to similar companies.
What they expect is to hear that you did at least some research about the company before the interview.
Example of a valid answer for a company which manufactures socks and needs a third developer in their IT department to maintain software they use internally:
I'm choosing your company because you have a solid business since 1982 and you succeed well both at the local and the national level. I also enjoy working with legacy COBOL code (don't say that if there is a person with some technical background in the room) and I always wanted to work on the software products for manufactures. I also following a special course on ETLs and found it really exciting, and I know that you're looking to extend your products with an ETL.
Example of a valid answer for a web design company:
I'm choosing your company because I find your products really exciting. For example, yesterday I visited the last website, example.com, you've done for your customer, and I found that it has an outstanding visual design. Especially, I enjoyed how you did the top menu and the filters on products page are really useful and intuitive. I also found that you have 7/12 on Joel test which is much higher compared to many other companies I've seen so far. Finally, I always wanted to work closer with designers, and this is a perfect opportunity for me.
Example of a bad answer:
I... ehm... I really don't know, you were on the lists... I found you... so I contacted you...