HI , I would like to pose a question here which is sort of connected, I have a custom web graphic design site and I am going to put together a set of web ready graphics to sell via affiliates. Is it better to use a new domain or just create a sub domain on the original site? I ask because I am not sure if tacking a sub domain on the site will hurt my page ranking.

I think you have three options and not two:

1) Create a Folder
2) Create a Sub-domain
3) Create a new domain

You have to ask yourself, do you want to create a new brand? or
consolidate the existing brand?

Do you want to spread your risks?

IMHO, pagerank does not come into the picture, and you should
take a decision based on answers to above questions?

Agree, at least you can have 3 options to choose from

I think you have three options and not two:

1) Create a Folder
2) Create a Sub-domain
3) Create a new domain

and by the way...

PR is being passes from the domain(index of the site) to the pages... That's how google passes it... The higher your PR on your inner pages the higher is the index of your site's PR...So if I were you lessen your pages if possible if you want high PR... if not your can build link with your pages...

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