Think of the subdomain as an apartment within an apartment building.

When building becomes famous because it is conveniently positioned in a good location, your apartment's value goes up. When you create a page on a subdomain for your business, you immediately give your page a boost in search engine results pages (SERPs). That's because primary website has already earned lots of links and credibility from search engines. There has been a lot of talk out there about the positive impact vs potential negative impact that subdomains can have on SEO performance. The reasoning goes that Google's algorithms will recognize your subdomains as sites separate from main domain, and rank them individually. In an August 2016 Hangout session, Google Webmaster Trends Analyst John Mueller addressed the question head on, stating that subdomains generally don't hurt site rankings: "[We] recognize that some sites use subdomains as different parts of the site," he said. "And, in the same way that other sites might use subdirectories."

According to Mueller, Google's algorithms are pretty adept at crawling subdomains and subdirectories equally well and making sense of it all. We can endlessly continue guessing, wondering how Google's indexing algorithm may actually works, the fact is - we don't know. And the rules keep changing.