Google's EMD & External Link Penalties A Case Study to Recover Traffic Break Up

Google rolled out EMD (exact match domain names) to teat with web pages who ranks well for having the same domain names as when Internet users type their search queries to search some and only the sites using the rich keywords in their Url name and title shows in search results.The sites that are found for about 5 to 6 years old usually understand it a great SEO technique to make sites more relevant for SERPs results.
Recently the current issue is being dicussed by forum member as their website also under a Google Penalty for webmaster guidelines violation and they clarify it some like as..

Our website, http://hairproductspro.com/  has been under a google penalty for some time now.  We had worked closely with an SEO firm for years to obtain highly ranked search terms related to our service and products.  We’ve always followed google guidelines.  However, on December 6, 2011 we had lost much of our high rankings.  Google had notified us that our website violates Google's quality guidelines.

After this notice from Google they immediately hire an SEO firm to clean out all violating issues, make their sites more unique and qualitative by bringing more use full and informative data to their site, also spent a lot of time rewriting content to make it more unique, and to keep it original, focused on the website internally fixing technical problems, content issues, and resolving broken or bad internal links to making it sure for escaping from any webmaster guideline issue, but the result are same and they again receive the current message from Google team.
  And in reply an other forum member drive their attentions towards the following two more issues 1.Exact Match Domain Name and 2. Anchor text Over Optimisation

Discussion about Exact Match Domain Name.
Well, even though "hairproductspro" may rather sound like a brand, or is of course intended to be one, it went straight into the trap of keyword anchor spam by having a third of it's backlinks anchor texts read "hair products pro" ... so, yes, this looks like a demotion due to a skewed backlink profile.

Discussion About Anchor Text Over Optimisation.

It's that sites like yours are stressing it far too much on certain keywords. Of course this is also unfortunately especially true if you have chosen something we today call an Exact Match Domain (EMD - a domain name consisting of, or containing, the main keyword(s) the site is targeting) - without having managed to build a real brand out of it over time. I don't know if that's the case here - but strongly suspect it is.

(A "skewed" backlink profile means you had to try to "unskew" it - get rid of, or/and disavow site-wide keyword anchor text links and try to get natural ones, that just link to your plain URL or use less competitive anchor texts in order to water down the, as I said, stress on your main keywords.)

Final Thoughts. 

Intentionally when you dare to link with already down ranking and low quality sites including your mostly exact match anchor text to your brand name, obviously it will be taken search engines as your bad neighbourhood sites that seems to sometimes also work the other way around, meaning bad sites linking to yours potentially hurting a site's se-performance and could be an author issue to.

What Site Owner Said in Thanks:  

 Thanks for pointing out the other issue that we really missed and doesn't focus on them during our reshaping SEO efforts for our site.That means the wastge of time and money as a lot of SEO experts told us that external backlinks are not an issue.