A question that comes across my desk a lot is “Should I use Subdomains or Folders?”
The Answer has 2 parts, do you want 1 Dominant Domain or Several Domains!
Google, Yahoo and MSN all treat Subdomains as separate websites, so to gain ranking for each subdomain is just as difficult as gaining ranking for several different domain names.
You can look at this different ways. So lets say you have a website that has 3 different areas, the website, the blog for the website and a forum area.
Under 1 domain with several Folders you could use www.mysite.com, www.mysite.com/blog, www.mysite.com/forums and have 1 Super Uber Authoritive Domain!
Using Subdomains you could use www.mysite.com, blog.mysite.com, forums.mysite.com and have 3 times the work but 3 times the benefit!
Here is the straight shot from my thought process. If your trying to do something on a limited budget and don’t have a lot of time use the folder option as this will give you the best benefit in the shortest period of time. From a Search Engine Optimization point of view all links going into the 1 domain name will benefit across the entire site.
If your looking to build something that has more emphasis on a part of the site, example you think or know that your forums will take a strong position first or your interested in building each part of the website piece by piece and have the money and time to spend on each part of your site, you could do better using subdomains and have 3 powerful parts of 1 domain!
Either way it’s a decision you need to make before diving into your endeavor, you don’t want to start with folders and end up with subdomains or vice versa because one way or another you will be doing double work!
Whatever you decide think long and hard, make a decision and go full steam ahead!