How do search engines handle subdomains in terms of SEO? We've covered this before, but this question comes up every so often and occasionally these things change.
On WebmasterWorld, tedster provides a rather interesting perspective about subdomains. I think the whole statement in its entirety deserves repeating:
There's no black and white answer, since a subdomain is a kind of hybrid critter. It's treated much more like an independent domain in many respects - for example, if urls from both the root domain and a subdomain show up on the same page of search results, they do not cluster together.
And yet, in some ways, it's still treated like the "child" of the domain is belongs to. For example, a subdomain can show up as a sitelink under the #1 ranking for the root domain if there's a home page link to it.
And then there's also some middle ground. A penalty or loss of trust for the subdomain does not necessarily affect the root domain. But this "penalty firewall" doesn't flow in the other direction. A penalty on the root domain will almost always affect any subdomains as well.
If you create a new subdomain for a trusted and well-ranked domain, it will still start out life a lot like other sites. It's PR must be calculated from the ground up - although links from the parent domain are certainly expected and will transfer PR to the urls that they link to. Time in the "honeymoon phase" and the "sandbox phenomenon" can often be shorter.
But a subdomain still needs to stand on it's own, in many ways - not the least of which is establishing a solid backlink profile. There's no "free ride" for it.
Very interesting information.
Forum discussion continues at WebmasterWorld.