We have a client with a great website but the firm keeps buying more domains for certain pages or themes from the main site. Here is an edited extract of my email to them:

One idea about the domain names. I think it is good to buy domain names related to the business. But as far as marketing in the search engines, I think it is a bad idea because it makes your online marketing a lot more difficult.

Instead of having one main site that ranks well and all our marketing effort goes into improving the quality and search engine ranking of that one site, we have to worry about marketing five [this client's] sites (or more). It becomes much more difficult, time consuming and expensive. Also Google and Yahoo punish sites with duplicate content, so we would need to remove most of the [product A] info (for example) from the main site and move it to the new [product A] site. Then I need to rank the new [product A] site for all the related keywords, to compete against other competitor sites and also against our other [this client's] sites that have same related keywords.

I have one client here in Japan that has 15 sites for their main business. They originally called me wondering why all the sites are ranked poorly and they have trouble finding leads through their sites. The 15 sites are competing against each other for the same keywords and phrases so they cannot get any traction against their real competitors. We are working with them to combine all those sites into one site under one domain name. Then they can focus on making that one site the best in their market.

The only time I would recommend having multiple sites is if you have a new product or service or business that is very different from your core business, for example if you offered [product A] for pro baseball players. Then the marketing copy, images, look and feel, etc. would be very different. We have a customer that is a successful retailer of hunting, fishing and camping products. They also sell law enforcement equipment to the local police, CHP, FBI, etc. The law enforcement marketing message is so different from their camping and fishing pitch that it warranted a different site which we built in a sub-domain of the main site.

Another company that has done this successfully is Pfizer. They have a separate site for each drug but since the marketing for those sites is different, (viagra vs. migraine drugs) and they have the budget to do it, it makes sense. In contrast, Honda has all their USA marketing under one domain name but they do use sub-domains for models: civic.honda.com , accord.honda.com, racing.honda.com, etc. They do not use a lot of different domain names to market online.

…Sorry for giving this as unsolicited advice but I think it is a mistake to built these mini sites. We can always buy domain names then point them to the main site but in my experience building these mini sites will dilute your power online to build [your] brand.

I think there are good specific reasons to buy domains and set up mini sites for side businesses, but I think there is an idea that it is a good practice to build sites to compete against your other site, which I disagree with. The only exception is if you have a huge marketing budget to pull off top ranking for many sites.