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I'm here with some different issue today. I have assigned a unique task in which my client has asked me about sharing of IP address. I didn't do this before. According to him, he has more than 200 websites, and he wants to run on the same IP. My question is that is this possible to run 200 unique websites on the same IP? or what I need to do to avoid penalization by the Google. In my point of view, the domain names would be www.abc.xyz.com (abc is a unqiue name) and xyz is an original site name. On the other hand I have an another option, i.e. www.xyz.com/abc.htm. Tell me which option is the best option to avoid penalization while running 200 unique websites.
With today's server technology it's possible to run 100s of websites or virtual servers on a single server, with a single IP address.
OTOH, if you client is running a spammy network of interlinked websites that are being used to artificially boost each website's ranking don't you think that you and your client might be making it just a wee bit easier for a search engine to identify "the network" and its "joint search engine strategies"?
If the 200 websites have nothing in common, other than hosting,
I'd say "no problem".
Yes, it can certainly be done- depending on your OS and web server and how you actually implemnent it, it can be very easy or painfully difficult. I suggest going the very easy route. :)
As far as any Google penalties, the subdomain vs. subdirectory issue gets discussed very often. I've done both and do well in Google.