Originally Posted by Transweb
I would hope that the googlebot is smart enough to understand that a link on a page labeled "Home" isn't pointing to a page about "homes" or "houses", but instead, to the root directory of the website and thus it won't penalize you for not having keywords associated with it.
There's a big difference between "penalizing" and "not benefiting" -- and a difference between "not benefiting at all" and "not benefiting as much
Google will not penalize
you for not having keywords in a link. There's nothing special or magical about links called "Home" -- or anything else for that matter.
Each page gets "link juice" from legitimate links pointing to it (which would, presumably, include links from other pages on your own domain), no matter what the anchor text of those links might be.
You will receive more
benefits when those links also include words and phrases that are relevant to the content of the page to which they point. The words in the link anchor text reinforce the text actually on the page and help Google determine what you consider the most important target words and phrases related to that page.
So if you have some philosophical objection to calling a link back to your home page anything other than simply "Home" or you believe your visitors will be hopelessly confused by links that use any words additional to "Home" in the link anchor text, by all means call your home links simply "Home." The home page will receive the benefit of having all those links pointing to it, but it will not receive the benefit of having keyword-rich anchor text links pointing to it -- because the links won't have
keyword-rich anchor text, and Google isn't going to pretend it's there when it isn't.
If, on the other hand, you want to give your home page (or any other page on your site) a boost for a particular phrase, then craft anchor text for links pointing to that page that includes the phrase you're targeting.
Google isn't going to tell you how to construct your link anchor text, so you can leave out the target phrases if it makes you feel better in some way, without any fear of penalty. But they aren't going to give you benefit for something you didn't
do, either, so if you do choose to leave out the target phrases, you need to understand that you're voluntarily giving up a potential extra boost for those pages.