This is not a tutorial or something like that, it’s just my opinion. So, let me give you two examples:
Google says that you should use a subdomain, if you have a different content that the root domain. If I have a website about fashion, and I want to have a blog about cars, then it’s better to have a subdomain. But, if I’m talking about fashion on my main website, and I want to write a blog about clothes from Milano, than I should usedomain.com/blog.
Anyway, we have to think why do we want a blog on our website. Just because we wanna blog, or because we hant to have fresh content on the website? If we’re talking about SEO, it’s clear that our main purpose is to have fresh content. And now we’re back to cars and fashion, our above example. If we use blog.domain.com, we will have fresh content on a website, but not on the root one. And in this case, I understand seomoz’s decision 😉
But, on the other side, blog.domain.com is not so bad. We have to keep in mind that, starting from september last year, Google sees links from a subdomain as internal links.
Also, think about the future, about the website in other languages. So, if we want to have the website in spanish, probably we will use a subdomain. If we’ll have a blog in spanish too, it will be blog.spanish.domain.com or spanish.domain.com/blog?
Also, on the other side, a subdomain or a subfolder will help us with geotargeting? Looks like it’s the same: read here
John Mueller says: We generally treat subdomains the same as subdirectories in that regard, both can use geotargeting. Sometimes one or the other is easier with your CMS or hosting, so I’d make that decision based on whatever works best for you 🙂
So, I am 60% for domain.com/blog and 30% for blog.domain.com.
10% is “other”.