Sub Domain Vs Subdirectory

I have been setting up some sites with sub domains even though a lot of people say that Google does not like them.

As with everything SEO there is a good and bad side to consider.

If you have a lot of page rank then you might want to consider that each subdirectory you set up will lose a significant amount of page rank.

Unless you can get people to link to the new subdirectory directly, which is not always easy to do, you should consider have a very flat structure and putting as many pages as possible in the main directory this will preserve the maximum amount of page rank.

I have not decided which I think is better to have sub domains, or sub directories.

To explain the difference:

Sub domain would be www.traffic.mg21.com

Subdirectory would be www.mg21.com/poker/

Google mostly treats a sub domain as a new site, where a subdirectory is just another page on the same site with a page rank penalty.