A DigitalPoint Forums thread asks, can multiple hyphens in a domain name raise a red flag with a search engine?
For example, if you have a domain name that is something like www.buy-shoes-now-online-for-cheap.com, would that type of domain raise a red flag with a search engine and warrant a manual review?
If you want evidence that Google does index domains with multiple hyphens, click here. The first result has six, I repeat, six hyphens in the domain.
So I would say there is no automated penalty for having many hyphens in the domain name but I would still be careful.
(1) It is not user friendly (2) It just looks weird (3) It may raise a red flag (who knows)
Forum discussion at DigitalPoint Forums.