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Domain Name can be classifieds into two categories:
1. Keyword Specific
2. Brand Name Specific
Keyword Specific Domain Name ----------------------------
When Keywords and Keyphrases are used in a Domain name then its called Keyword specific Domain name.
Keyword in
domain name to my mind has two advantages.
One It is better to have a keyword domain name for it is worth remembering that most of
people link to you using your URL. If your URL has
keyword or
keyphrase then you are automatically using
keyword in
very important anchor tag.
Secondly, though marginally, in a ranking scenario with every other parameter remaining equal,
Keyword Specific Domain Name will enjoy a slight edge over
other web site. However remember Keyword used in Domain name should be primary and generic. Specific keywords can be used in
sub domains. Read about
use of subdomains.
Keywords and Keyphrases uses with hyphen/underscore in Domain name are said to preferred as they are read by search engines as separate words. So
domain name can have a search phrase incorporated into it. However
flip side of it is that domain names with hyphen or underscore are inconvenient to carry.
Brand Name Specific Domain Name -------------------------------
When company or organizations’ name is used in Domain Name to brand it then it’s called as Brand Name Specific Domain name.
Brand Name Specific Domain Name does not help online searches at all. However they are very powerful tools for company identification in
mind of users. In
anonymous online world a brand spells loyalty, trust & value. So if you choose to go for building your brand rather than deep rooted optimization, one way of incorporating keywords is through your directories & pages names.
KEYWORD DENSITY ---------------
Keyword Density is a proportion of
searched term ( Keyword or Keyphrase) against
whole words written on a given page. The ideal Keyword Density is 6%-8% though various search engines have various tolerance levels before their spam filters get activated. Higher Keyword Density does help to boost a pages’ ranking.
Keyword Density can be increased by using target keywords repeatedly in Title tag, Header tag, Body tag, Comment tag, Alt tag, Anchor tag, Paragraph Tag , Domain name and in diretory/page names.
However one disadvantage of trying to hike
keyword density is that
visible text on
page starts to look spammy if it is not carefully crafted. That makes for a bad copy.

I'm an eBiz consultant and owner of Mosaic Services- an SEO Company. I regularly write and submit articles on various SE specific topics.