Matt is the closest thing to an SEO spokesperson for Google. In this post he outlines Google’s policies on the use of subdomains vs. subdirectories in URLs. If you’re not clear on the difference here’s his explanation:
“Historically, it’s been kind of a wash about when to use subdomains vs. subdirectories. Just as a reminder, in a URL such as subdomain.example.com/subdirectory/ , the subdomain is “subdomain” and the subdirectory is “subdirectory” (also sometimes called a folder). If you’re still unclear, you may want to read my tutorial on the parts of a URL.”
As usual he is intentionally vague in how Google ranks these. It interests me because we’ve been experimenting with acquiring some domains that we can extend with subdirectories. An example is BestBarIn.com/Rochester (there is no site yet so don’t bother checking). Theoretically we only need the BestBarIn.com domain and then we could build out an entire range of cities using subdirectories. This would give us the advantages of geo-focused domains without having to buy hundreds of individual domains. It would also mean that that domain would become a very valuable property, assuming we can get search results for that keyword string (i.e. searcher enters query: best bar in Rochester and we come up). That’s the $50,000 dollar question, actually more like the $5mm question!
And we don’t know the answer. If you have any insight into this we’d really like to hear about it.
Oh, and read the comments on Matt’s post- a lot of people are wondering about this.