The address that appears in the browser bar when you visit a webpage is also called an URL or “uniform resource locator”, an addressing protocol used for locating many internet resources, not just webpages. URLs have much in common with the directory structures used on hard discs. Both use a slash “/” (sometimes “\”) to indicate a subfolder.
In practice, modern websites often pull content from databases to create pages on the fly. Therefore, the browser address doesn’t necessarily tell you where everything is physically, and all that matters is that you have a structured way to retrieve it. (In fact, hard disks don’t store content in physically different folders either, they use a “file allocation table” to find them).
As an example, if the URL is
dodgyphoto.jpg is a file and “private” is a subfolder of the “photos” folder.
Note that the hierarchy works left to right, so “private” is inside “photos”.
The other part follows different rules.
“SmithFamily.com” is the domain name you chose when you set up your web hosting. The parts are now separated by dots instead of slashes. The right-most part (“com”) is a “top level domain” shared by many websites (explore them on the names.co.uk web hosting website). “SmithFamily” is a “second level” domain. Together they provide a unique address for your website. This time, the hierarchy is right to left, so “Smithfamily” is a subdomain of “com” and “Jacksfiles” is a subdomain of “Smithfamily”.
An URL is therefore made from two different addressing schemes each used by different systems. Domains and subdomains direct traffic across the Net, while directories and subdirectories are located by systems on web hosting servers.
Just like a domain, a subdomain can contain an entire independent website (“Jacksfiles.SmithFamily.com”) with its own landing pages, or it can contain files you want to keep separate from your main website. Name servers will direct access to them whether you keep them in a subdirectory of your main web hosting space or on an entirely different server.
Usually, it makes sense to keep a website’s pages in a single folder, but, suppose your business operates in several different areas. For example, imagine you sell appliances online, but you also specialise in B2B contracts with developers, and also have a spares department. It could make sense to build different websites for each; shop.homesource.uk, wholesale.homesource.uk, and spares.homesource.uk.
How SEO is affected
Google says it doesn’t care if you use subdomains or subfolders, it scores them with the same algorithm. But to a webmaster it matters: good SEO depends on the focus of a website being clear and strong. If each of your operations is different, combining them on one site will dilute your message, but if they are closely related splitting them between subdomains might dilute your efforts.
Your security requirements may also be completely different for different activities, so running subdomains as independent websites often makes practical sense too.