Google To Count Subdomains as Subdirectories

This is a big change which has 2 parts and multiple implications.

• Google will start treating subdomains as they treat subdirectories
• Google will limit one URL to only 2 results in a search query

This news comes from Matt Cutts at the recent Pubcon conference. The intention here is obviously to limit domain spamming.

Its not clear to me whether or not this actually means that as far as value goes, the subdomains will be treated as subdirectories, in other words will they pass value back to the main domain as subdirectories do? Subdomains always existed as this partial exception in Google's eyes, not purely a different domain yet not purely part of the main domain as a subdirectory.

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