How subdomains should be writtem

This is in connection to an earlier thread http://forums.digitalpoint.com/showthread.php?t=1125495.

I received no reply on this so I am posting it again.

I want to add subdomains to my site. These subdomains can be of two types:

1) www.sub-domain.mysite.com
or
2) www.mysite.com/sub-domain

Which of the two types is better from SEO point of view?

 

2) but it's not a called a "subdomain." It's just a directory.

 

2nd option would be better

 

first of all let me clear that what you have written as sub-domain is not known as sub-domain. if www.xyz.com is domain then abc.xyz.com is a sub-domain.
you should ask that whether sub-domain should be used or a sub-directory. well the usage of either of them depends on the requirement. if you want to host completely new content which is large enough and not related to the content on your main domain then you should use sub-domain or else go for sub-directory

 

For 1st editing needs to be done is
advanced DNS control panel of Domain.
Whereas for 2nd you need to put that
application with that name(sub-domain)
into your webserver folder.

 

very much correct

 

Whether it is a directory or a sub-domain, it hardly matters. All I wanted to ask is if I have multiple categories, which method is better for SEO: sub-domain or sub-directory?