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Recently i came across an article claiming free sub domains like blogspot,tumbler, wordpress etc are not ranked well in SERP & top domains are ranked better. Is it true?

suppose there are 2 posts, say www.xyz.com/1.html & www.xyz.blogspot.com/1.html

Does Google differentiates between them or it sticks to the quality content.

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That article is incorrect in its assertion. It's not the fact that those blogs are on subdomains that causes them not to rank well. It's their low quality content. There are plenty of blogs on those sites that do rank well and it is because they have good content.

FYI, having a domain name containing keywords would help those sites rank better but so would choosing a good subdomain/account name for their third party hosted blogs. In other words a site about jokes would be better off using jokes.tumblr.com than britneyspears.tumblr.com.

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Then why self hosted blogs are so popular and people prefer using self hosed wordpress ? there must be some reason. – Sangram Nov 14 '11 at 14:17
The reason is they make it easier to get started and to manage as the user doesn't have to worry about anything other then writing content. – John Conde♦ Nov 14 '11 at 17:07
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