Sub Domains versus Sub Directories

Sub Domains Approach

Sub domains are generally used to organize website information. Large websites may wish to organize their information in categories such as blog.example.com or shop.example.com. The benefit of using a sub domain is that you can move the entire contents of a sub domain to a dedicated server. This may be desirable when a lot of Internet traffic is concentrated on a particular part of the website. Search engines consider sub domains to be a different web site separate from their parent domain. Generally sub domains are recommended for very large sites with an incredible amount of traffic. About.com is an excellent example of a site that uses sub domains to organize content.

Sub Directory Approach

You can use sub directories instead, like example.com/blog or example.com/shop.  The benefit of using sub directories is that all the traffic is hosted on one website thus increasing the traffic rate on your website. This method is recommended for most websites as it helps build your website ranking since all traffic is funneled through your main domain. Amazon.com is a great example of a site that uses sub directories to organize content.