1. e4 e5 2.Nf3 Nc6 3.Bb5 Nd4 how to continue

Hi,

I was playing using the Ruy Lopez opening; 1. e4 e5 2.Nf3 Nc6 3.Bb5 and was expecting 3... c6 or 3...a6. However the response was 3...Nd4 attacking my Bishop at b5.

How should we respond? Also I have shown how the moves went ahead and not quite sure how to continue from this?

5...c7-c6, 6...d7-d6, 7...Nf6 are possible...

 Bird ContrAttack is hard to stop by white, without experience and good End Technics!

Black Pawn Domination on Center and Queen side is a Topic here!

So what would be the way to continue as I was playing White?

1. e4 e5 2. Nf3 Nc6 3. Bb5 Nd4 4. Nxd4 exd4 5. O-O Bc5 6. d3 c6 7. Ba4 Ne7 etc.

Ruy Lopez Bird's defense, ECO: C61 NIC: RL 5.  I'd suggest investing in a one volume opening reference to get basic lines (MCO, NCO, etc) or learning some online resources like: http://www.chess.com/explorer/index.html  http://www.shredderchess.com/online-chess/online-databases/opening-database.html  http://www.newinchess.com/

But shouldn't white try to undermine the d4 pawn? Isn't it being there cramping white?

My files have White scoring 63% after 5 0-0 though not all losses are the fault of the  opening (N=1,800)--Kasparov has played (the move 5. 0-0)  it 5 times 9+3,=2) and Karpov has played it 3 times ( +2,=1) 

Thanks for pointing me those resources.

The pawn on d4 is not such a big deal. The white sq. bishop is already developed outside the pawn chain, so after 0-0 and d3, a basic plan for white is to prepare and execute f4, followed by Re1 and Nd2-f3. Only after you are developed you can start putting pressure on the d4 pawn. On the other hand, black will play for d7-d5, so as white you must make this as hard as possible for him. You must be careful however about the e3 square which becomes after playing f4, and black knight there will get you in trouble.

1. e4 e5 2. Nf3 Nc6 3. Bb5 Nd4 4. Nxd4 exd4 5. O-O Bc5 6. d3 White is better.

after nd4 how about bc4 attacking f7 with plans of qh5 after the g pawn moves

Bc4 is not a good move. The f7 pawn is protected and easy to defend it any time. 

I always play 0-0 after Nxd4-exd4. White has big lead in development, the d4 pawn can be weak, white has good central control and attacking chances after f4 is played. So something like this.