For SEO purposes, what would bring in more keyword weight, supposing that people were looking for the phrase "argentina widgets":
1. Sub domains
argentina.widgets.tld
2. folder
widgets.tld/argentina/
It would seem that option 1 is the logical option to take, because it is in the same order as the search. However, would SE's think it is a site of its own and ignore the widgets.tld? Thus giving it only weight on "argentina", instead of in "argentina widgets".
It will treat it as a seperate site from www.widgets
Very true, and quite nice if there are enough other "signals of quality" that warrant it being considered as a stand-alone site. A separate DMOZ listing would go miles in that direction. Or a Yahoo Regional listing. Independent IBLs - significant content, all that kind of thing. But a one page subdomain wouldn't get much clout, even with a keyword.
You get the multiple Dmoz listing, more PR, more links, and then that popularity is distributed through all sub domains.
The site will have subdomains, because as in example argentina.widgets.tld, these subdomains will be country specific. However, they will all be about widgets and will share general information from widgets.tld through cross linking.
First they hire some of the tops SEO guys out there - this is what the generated (One of many things)
[buy.ebay.com...]
[buy.ebay.com...]
[buy.ebay.com...]
etc etc etc
They get really high rankings for many of these combos
I hope eBay is generic enough not to get moderated out -- sorry if it does...
FULL DICLOSURE: I do not own any stock in eBay... But wish I had bought 3 years ago...