I'm not SEO guru, but that topic lies naturally in my interest because I'm admin of several websites. I noticed that one on of my friends1 loves to use the sub domains for his projects. It is wisely semantically, but is not so in every his project is i think :).
The Question here is how "Google & Friends" :) treats sub-domains and how it treats sub-directories? In best case you get the answer from Google at selves.
What Google thinks about subdomains
What's the difference between using subdomains and subdirectories? When it comes to Google, there aren't major differences between the two, so when you're making that decision, do what works for you and your visitors. Following PubCon, our very own Matt Cutts ... on his personal blog. In addition to those considerations, if you use Webmaster Tools (which we hope you do!), keep in mind that you'll automatically be verified for deeper subdirectories of any sites you've verified, but subdomains need to be verified separately.
Google say it does not matter what you use for them, gives you only some more headache with using of Webmaster tools, but they refer to Matt Cutts - highly cited CEO Guru.
What Matt Cutts thinks about sub-domains
Mat Cutts says in his Subdomains and Subdirectories article:
My personal preference on subdomains vs. subdirectories is that I usually prefer the convenience of subdirectories for most of my content. A subdomain can be useful to separate out content that is completely different. Google uses subdomains for distinct products such news.google.com or maps.google.com, for example. If you’re a newer webmaster or SEO, I’d recommend using subdirectories until you start to feel pretty confident with the architecture of your site. At that point, you’ll be better equipped to make the right decision for your own site.
Even if Google lies, we know that also Matt Cuts believe, that it does not matter what you use, but subdirectories are easier to maintain.
So this is a very good situation, when subdirectory and subdomain has no relevance in SEO sense. We can arrange them semantically and forget to consider strange optimization rules you can find on the world wide web. Therefore i think sub-domains should be used to satisfy the following:
- Separating of Responsibility. E.g simon.zambrovski.org domain is part of zambrovski.org family's domain. So when Simon does the administration for his subdomain, maybe his Grandpa does it for the zambrovski.org
- Separating of Subject. Subject must be in some own hierarchy. So e.g. Google.com of cause owns their product adsense.google.com witch is good example of separation Subjects.
In other cases i would use subdirectories.