I want to do blog.mysite.com but i know it will negatively impact my PR with Google. When is it preferable to structure your site like that vs mysite.com/blog? Is it only for the benefit of PR?
The only time I would use a subdomain is if the site is truly a "different site". Take for example my business site I have the following setup.
http://www.iowacomputergurus.com - Business site
http://productsupport.iowacomputergurus.com - Bug Report Site
http://customersupport.iowacomputergurus.com - Customer Helpdesk site
Using this structure all of the business stuff, including the blog is on the one site, but the stuff that is truly different, the various support sites are offloaded to sub domains so that they are separate.
In my opinion, if you REALLY want to use blog.mysite.com say for ease of remembering, setup a 301 redirect that takes users to http://www.mysite.com/blog or something similar.
If you DO use subdomains, depending on the sophistication of your target audience, be prepared for users to add www. in front of the host name automatically (www.blog.example.com). Setting DNS up to support this is something that I've never taken the time to figure out; it's possible but takes more effort than just adding another CNAME.
The usual recommendation we hear from SEO consultants is that you should really only use a sub-domain for short-lived "micro-site" type content, and all long-term content should live on the main site.
As others have pointed out, you lose some of the "authority" (and therefore Page Rank, etc.) of the main site when you go out to a sub-domain because they are treated as separate sites - you've clearly decided that you don't want the content on the "main" site, therefore it is less relevant.
Analytics tend to be a lot easier when you don't have sub-domains.
First and foremost for the benefit of users. Words before a domain are usually typed in, whereas words after are often left out. The user usually expects to be able to navigate to the path after the domain themselves.
Where this is not the case (nested links to get there) or the navigation changes drastically (which it can in a blog) then it is not really the impression you want to leave for someone who has bothered to type in an address to their address bar.
The PR of your site will only be negatively impacted upon if the blog is unrelated (treat it as a PR building hub site). If it is not unrelated then it should be a boon.
if you’d like to build the equity of one web site, I suggest using a subfolder.
If you’d like to build an entire new entity with its own equity, launch a subdomain