Difference Between Sub Domain and Folder under Domain Name
Generally serach engine consider Sub Domain as a different web site and crawl it independently to the main domain name such as http://merchant.50webs.com but in case of folder serach engine will consider it as a part of the original web site and generally it needn't to add the files within a folder to the search engines as the main page get crawled it will get listed gradually if it is linked from the home page or other pages within the site. If you are desired to create a site not relevent to the main home page it will better to create sub domain for your site and you should add it independently to the search engines to crawl it properly. But in case of folder you dont need to do such thing.
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