plondon - 9:02 am on May 14, 2011 (gmt 0)
Even if it was my plan to build one large site, I'd still probably start with a bunch of small sites.
A common SEO strategy is to build satellite sites to assist the ranking of the main site, and to 'widen the net'. I just do this the other way around - build a bunch of satellites first.
This gives you two options. One is you can use the research of the small sites to decide where you can compete best, plus you have a bunch of seasoned sites to act as links. The second is you take the best performing site and build that out into a large one, using the remainder to link back.
Since Panda I have found that one or two of my sites have plummetted, but others have remained more or less untouched. Yet they were all built the same, and all have unique and original content. Why would one or two be affected and not the others? For this reason alone, multiple sites must be the best policy.
When your environment is unpredictable - diversify.