Absolutely not. Check one of my hyphenated sites as reference: dubaimarina.com - Google Search
I love hyphenated domain names
I loathe hyphenated domains names
I have never tried hyphenated domain names
I have never really thought about hyphenated domain names
I still think that it's better to have both the non-hyphenated version of the domain and redirect the non-hyphenated version if available.
On the other hand, many of the non-hyphenated dot coms are parked by domainers asking a lot of money. So, it would be easier to get the available hyphenated version.
That's the point. Most domainers are living in the past, if it's not for setting up a brand, you don't need the non hyphenated version of the domain. In my case I could spend a couple of grand for the non hyphenated version and I would not be better off, so it makes no sense to buy it.
However, there are two issues that I see: 1) Exact match bonus for non hyphenated .com/.net/.org - this would cause you to have one arm tied behind your back against competitors using EMD domains 2) Domainer sells domain - this could cause confusion.
In cases where you are already using hyphenated-version, it's better to stick with it. Doing a 301 redirect to the non hyphenated version will cause around a 30% loss in the flow of PR.
Btw, I agree with you that the non hyphenated version won't give you benefit and wouldn't be worth the expense. I in the same boat as you on one of my domains where I built the site on the hyphenated version of the domain. I do own the non hyphenated version though.
The exact match bonus only applies to non-hyphenated domains (in the testing that I've done) with the com/net/org tlds. Though, I believe that the hyphenated domain still gets a bonus for keywords in the domain.
It's rare to see hyphenated domains ranking on competitive keywords and most of those are from the mid 2000s when the hyphenated domains were popular. So, the older hyphenated domain have had time to establish themselves. But, it's rare to see new sites ranking on the hyphenated domains.
A whole country (Germany) cannot be wrong.
bogart (5 April, 2011)
However, I don't really see the hyphenated domains and other TLDs ranking as well as the EMDs. You would expect the IM industry to be buying these up if there were working well.
Searching on weight loss in G reveals some interesting variations of using the keywords in the domain name and directory url in the first page results. I suspect that the lack of hyphenated domain names is more about preferences of the buyers of domain names than anything else. Short domain names tend to be favored, so using a filler word in the domain rather than padding out the exact match keywords with dashes seems to be more popular.
So a domain like: fast-weight-loss-tips.org seems to be less popular to register than say fastweightlosstipsguru.com