For illustrative purposes I'll say my domain name is freesmsnchat.com I started the site and optimized the page for free msn chat. After a couple years I had gotten a good number of backlinks and was pr5 and the site was number 1 on google for that term. I then realized that I was getting more hits for msn chat which I was ranked 10th and as many for free chat where I was ranked 20th, so I began optimizing for those terms. Eventually I was #1 for msn chat and #3 for free chat. Now I know I had done something stupid, when making changes on the site rather than use redirects or simply have pages with names changed result in a 401 I had setup the server to automatically redirect requests for non-existant pages to the home page. Then came september 21 (black wednesday) The obvious answer when the term free chat dropped totally out google was "duplicate content" however the terms free msn chat and msn chat only dropped 7 and 10 spots respectively. So was that a duplicate content penalty or did I push the term "free chat" so much on the page that it was considered spam after the update. Sorry for the long winded post but it was needed to describe the situation. Any input would be appreciated.
It may just be the way the new algo is ranking - for instance in your backlinks, the linked anchor text might be "msn chat", giving you a higher ranking for that phrase etc. Try and diversify your backlink anchor text to include all phrases you want to rank for. (If you havent done so already)
I'm not complaining about being victimized but I would like to have some clue what the culprit was. Many of my backlinks are from a java script I offer which includes a backlink, I recently changed the anchor text on that from freemsnchat to free chat so I sort of have that covered but I'm also wondering whether thousands of free msn chat links possibly got me penalized as well for the appearance of link farming or something.