Subfolders vs Sub-domain for SEO
Many times when we are developing the site structure, we are given the options of running different part of the site on either sub domain or sub folder. An example will be:
sub-domain – http://career.microsoft.com
sub-folder – http://www.microsoft.com/career/
As discussed in previous post, search engine view subdomain site as a different site so the work you have done on the sub domain does not directly affect the parent domain as they are viewed as a separate entity.
Thus, I will personally not recommend having a sub domain unless it’s absolutely necessary. I will rather have a sub-folder which basically still sits on your parent domain (http://yourdomain.com/myfolder) thus inherits and contributes to the overall pagerank of your site.
Furthermore, forums and blogging engine these days help to generate a lot more content on your site and you want those content to contribute to your parent site so that you site will appear in the search result page (SERP) of more keywords. (e.g. of your visitor starts talking about “Zune” and generate enough content on Zune, you want your site to appear in the SERP when people search for Zune. However, if we are using sub-domain, only your sub-domain will appear in the SERP and your parent site will not be shown.
Also, search engine algorithms will usually not return all the sub-domain of your site as there is a “two-page limit” for SERP result (thou not always… but it’s a lot harder for you to get more than 2 listings on the same SERP page unless all your subdomain is highly relevant to the keyword).
In conclusion, I will strongly encourage site owner to make use of sub-folders whenever possible. They should only consider a sub-domain if the sub-domain is serves a totally different purpose from the parent site and significant SEO investment into the new site is available as launching a sub-domain is similar to launching a brand new site from scratch. 
