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If I can revert from the ubiquitous widgets for a less abstract but hypothetical situation, let's say I own Ankh-Morpork-football.com. I want to create a high-content one-stop resource for followers of football in the Discworld capital.
Of course, I know that no-one in their right mind is going to search for "football in Ankh-Morpork". More likely, they'll search for their own teams by name (and curiously, none of those contains the name of the city). As a former programmer (now an up-marker ;)), I would logically create sub folders for \militia, \fc-falstaff, \cholski and the other teams in the city.
The problem here is that any study of the SERPs shows that the big G in particular does not favour sub-folders for competitive terms. Better to create militia-football.com, fc-falstaff-football.com, etc, or their equivalent canonicals: militia.ankh-morpork-football.com, falstaff.ankh-morpork-football.com, etc. The disadvantage to both approaches is that the high-content resource I had originally planned may now be a website of one page - essentially a doorway page to the other sites - and instead of developing a single large authority site I have many small ones.
Add to this the fact that there may be several other money phrases I want to hit - books, videos, etc. - and some non-money ones - news, match reports, etc. Using the folder approach I would create a folder for each and another called \articles and simply link each article from the appropriate folders. Using canonicals or separate domains do I create domains for each phrase above, money and non-money? And where do I put the articles?
Another thought. What if all the clubs on my site actually existed in different ccTLDs? Would I be better going for militia.co.uk, fc-falstaff.il, cholski.ru?
The web site I launch today will be around, in one shape or form, long after today's SE of choice. As it expands, updates or improves the hardest thing to change will be the structure, particularly with a well indexed site. Yet the structure designed today must stike a balance between good programming and site design, useabilty and good SEO.
How do you find that balance?
Folders or domains?
The reason I refrained from using widgets is that this question largely depends on the competitiveness and range of the keywords. As I usually understand the widgets example, widgets.com might target "widgets" at the top of the pyramid, then "red widgets", "blue widgets", "wooden widgets", "widget history", in folders below. The folder approach works well here, provided:
In other cases (as above) widgets.com may target "quarks", "quangos", "quacks" and "quizzes", where
Incidentally, in my example I am not trying to disguise the relationship between the domains. As they will be heavily cross-linked naturally, I believe Google certainly and other engines in time will see them as one large site living on separate domains. Index pages and root files will still beat subfolders though.
Multiple domains or canonicals?
There's not much difference, provided you don't overdo the canonicals to the point of making it look like wildcard DNS. The advice seems to be base them on logical site structure rather than keywords. (Though you should of course name them with keywords.)
Canonicals may help branding, since what was intended was one authority site. Multiple domains might make it easier to generate more links and directory listings, as well as allowing different ccTLDs.
Is this just an attack of portalitis?
Perhaps. I know of many excellent portal and community sites that have high traffic but low visibility in the SERPs for all but very specific phrases. In may be unwise, or even impossible, to have one site target different markets, even if they are strongly related.
