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    Question on possible penalty for high keyword density

    On www.techbarn.net I have a simple navigation menu on the left hand side that has hosting and web hosting mentioned multiple times. This actually brings the density for hosting up to usually about 13% for the front page and even higher for some of the other pages.

    I rank 15 in Google for "startlogic" and 11 for "startlogic review" but as soon as I add "hosting" or "web hosting" or any such combination to the results I don't rank at all.

    Could this be due to a penalty of some kind? I kind of like it the way it is so im trying to figure out what to do. If it is a penalty because of that will it eventually pass? Can I smooth it over as I build content for the site and level the keyword density out or is the one after the other thing in the menu just too much?

    I rank decent for both startlogic and whatever else on earth including "startlogic web" but as soon as I add "hosting" to the mix I don't rank at all. I know it's a terribly competitive term but am still curious.

    Also I have an XML sitemap for fun. For some stupid reason Google likes it and is sending referrals to a page full of XML. Would it be better to just drop this altogether and put up a site map with html. I already have a Google sitemap just put up the other to try to get Yahoo to hurry up and get me some more indexed pages.
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    Hosting is in itself a very competitive keyword.. and same goes for web hosting a very very competitive keyword.. with more than a million searches over a month.. so forget web hosting .. try to concentrate on diluted keywords like web hosting country name web hosting .ner kinnda domain which are comparitivly easy to rank for ... now because the keywords are so competent and you site is not that is the reason you are not being ranked for these keywords... it has nothing to do with the keyword density.

    and now i have noticed that if the keywords are placed in a natural way in paragraph then it wont harm .. it should not give a feel that keywords are stuffed

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