blog.domain.com is interpreted as a website in its own place, where domain.com/blog is seen as a subpage or subdirectory of domain.com depending on how your blog is configured. I believe that Google Analytics even has the ability to check and track the subdomains that separate them as a separate site.
A site, such as DIYNetwork.com and About.com, uses subdomains because, although it still depends on the parent URL, it makes it easy to host a completely different and independent website in analytics tracking.
hsatterwhite
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