mihomes - 7:11 pm on Mar 25, 2013 (gmt 0)
I truly believe part of what people are seeing has to do with backlinks as well. You have an EMD of kw1kw2.com or whatever where the two clearly describe your site offerings, products, whatever. Now, especially for some of us who have had these for 10+ years or so. Think about how other sites are linking to yours and with what words... naturally they will link to the site with, more often than not, those exact same keywords as the anchor text.
Is this wrong? IMO no not at all, but I think the algorithm might see this in a different way.
Either way, part of the original spec of the internet was for domains to be named appropriately for the content on them - it just makes sense. To use an example from earlier... you sell blue widgets... you buy bluewidgets.com... people are naturally going to search for blue widgets and in turn when people link to your site they will more often than not link to it with... drum roll... 'blue widgets'. You probably have your site title as blue widgets as well. Everything makes perfect sense, but I don't believe it does to G anymore. They would rather see everything above except the domain would be 'gfkgjdfhgh.com' where that is some non-generic, probably madeup word, that doesn't describe your site content at all. In turn, people who link to it with the same anchor text (probably your title) yet the domain now doesn't contain the kw's. Now, gfkgjdfhgh becomes associated with those words possibly whereas the emd gets the shaft.