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Well ... in terms of seo, using a subdomain probably hurts. Google sees them as more or less different sites. Think of the tens of millions of sites like xyz.blogspot.com and abc.wordpress.com. Most of these have nothing at all to do with each other, and very little to do with their 'parent' domains: wordpress.com or blogspot.com. Google doesn't see blog.forrestcroce.com as quite as different from forrestcroce.com as the well known examples ... and honestly, it's not.
So, instead of having one site to promote, I have two. I now have more or less external links from one to the other, but all the work I do promoting my sites is divided between the two. The 'main' site gets maybe 15 % of my attention, and the blog 85 % ... it could be 100 % to the whole, and Google can work out the details however they'd like. In most cases, using subdomains is more of a liability than a benefit in seo terms ... at least that's what I think, based on what I know.
But the whole seo thing takes a back seat to the 'user experience' and how easy things are for me to manage. I like that my readers can clearly see how I've divided my attention and presentation. To me, they are different sites. And, my host has already brought my account down for five or ten minutes at least once because of cpu use from wordpress, while the main site is static html, which doesn't really use any cpu. Keeping my options open is more important than any seo gains or setbacks.
Oh ... this is something I've read, but I'm not sure what the status is. When you come up in a search, if Google likes your pages, it will show two of them. Some people have been either going after long tail phrases, or doing a lot of work on ten subdomains ... and then having ten of their own subdomains on the first page of a Google search to force out any competition. Matt Cutts says they're putting an end to this.
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