They both have their advantages and disadvantages, so it’s really a question of what works best for your company.
Let’s take a look at both options in-depth so you can make an informed decision.
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Option 1: New domain
When you create a new domain for a subsidiary, you’re starting a website from scratch.
That means you have to set up a unique Internet marketing strategy for it and follow through to consistently generate returns for your company.
The URL for your subsidiary’s new domain would look something like this:
Let’s take a look at the pros and cons of getting a new domain for your subsidiary.
Pro #1: Unique identity
When you get a new domain for a subsidiary, you also give it a unique identity that it’ll retain for years to come. That helps establish your subsidiary as its own brand, instead of a puppet company that depends on your business to survive.
Con #1: Starting from nothing
Whenever you start a new domain, you have to start everything over again — keyword research, content generation, A/B testing, conversion rate optimization (CRO), and search engine optimization (SEO), among others. Your new domain probably won’t rank for several months, if not a full year.
Pro #2: No inter-site reliability
When you create a new domain, it stands completely on its own. That kind of freedom also means that you don’t have to worry about whether or not your subsidiary is somehow related to your parent company.
For example, if you ran a website that received commissions for made-to-spec mining equipment and set up a subsidiary that sold running shoes, you couldn’t have them on the same domain name. They’re simply too dissimilar to effectively get clients for either company.
But if you want to diversify the interests of your parent company, you can easily set up a new domain for the shoe subsidiary without worrying about how it relates to your mining equipment. That way, you can profit from both companies without any awkward or confusing overlap.
Con #2: Additional bookkeeping
Every time you create a new site, you have to keep track of that site’s user and login information.
That means to be effective, you should establish a system to keep track of FTP information, logins, IP addresses, registration, passwords, and all of the other identification that you need to maintain a website.
This might not sound like a huge obstacle to established businesses, but the smallest companies don’t always have this kind of infrastructure in place. It’s far more common for employees of a five to 10 person business to play multiple roles all at once — and that means it’s easy for information to fall through the cracks.
So if you work at a company that only has a few employees, make sure you establish someone who’s responsible to keep track of your information, and make sure they have a system to keep track of it all (including backups).
Option 2: Subdomain
If you don’t want to start a new domain for a subsidiary, you can create a subdomain instead.
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Subdomains are great ways to come right out and tell visitors that a certain brand is a subsidiary of your parent company. Your URL for a subdomain would look something like this:
Let’s look at the pros and cons of a subdomain.
Pro #1: Established link portfolio
When you create a subdomain for your subsidiary, you immediately give your subsidiary a boost in search engine results pages (SERPs).
That’s because your primary website has already earned lots of links and credibility from search engines. As a result, the pages that you create for your subdomain will receive that same preferential treatment, as long as the subdomain is related to your parent company’s domain.
Con #1: Subsidiaries must be related
We mentioned this in the previous section, but if you want your subdomain to successfully grow from your parent company’s site, the two must be related.
Search engines like Google are much more sophisticated than they were 10 years ago, and they can tell when you’re trying to promote a subsidiary by having it ride the success of your past website.
If you use a completely unrelated subdomain with your website, it could affect your SERP rankings, not to mention confuse customers who don’t understand why one brand’s website is on a completely different company’s domain.
Pro #2: Link growth opportunities
Now that you have a subsidiary business operating on your company’s domain, you have an entirely new chance to earn links for your website.
Those link opportunities come in the form of new blog posts, new article pages, and any other new content you want to introduce to your customers.
That means the more links one of your companies gets, the better both sites will perform in SERPs.
In terms of synergy, few Internet marketing strategies can match these benefits.
Con #2: Less memorability
Perhaps the biggest downside for using a subdomain for a subsidiary is how it impacts the views of your consumers.
Subdomain companies risk not being as memorable as companies that have their own domain names because they’re dependent on the parent company’s TLD. That means a customer has to remember the names of both brands to immediately jump to your site, and your subsidiary doesn’t have an independent online identity.
That may not be a huge issue for your company. But if you’re trying to establish a standalone subsidiary that can fully function as its own brand, using a subdomain for its online presence probably isn’t your best choice.
WebFX works with new domains and subdomains every day
At WebFX, our talented team of Internet marketers works with company domains and subdomains each day. With our expertise, we help businesses like yours build their SEO campaigns from the ground up depending on what they need.
If you’re considering launching a new subsidiary website, we can help. Contact us today to create an SEO plan for your subsidiary’s new domain or subdomain!