Around 2001 I started a web site called tedmasterweb.com. It was my professional face on the web with “articles” I’d written and software I’d produced available for download. Some of the software was quite popular and garnered me a PageRank 5 for the site as recently as October 2006.
In the first half of 2007 I decided to try an experiment. Being a partner in Clevernet, it seemed logical to merge the resources on my personal site with those on clevernet.biz. Since merging the content could have been a time-consuming task, I decided to make my entire personal site a subdirectory of clevernet.biz: Basically, tedmasterweb.com would become clevernet.biz/tedmasterweb/.
Today, several months later, it would seem that my PageRank of 5 for tedmasterweb.com has been completely lost. Just issuing an appropriate redirect, in my case, was not enough to maintain it. I suspect that if I could get all the people linking to resources on the old page to update their links to point to the new location I would regain some, or all, of my PageRank, minus the penalty for not updating the content regularly and for the links being somewhat old. As soon as I post this article, I’m going to go after those old links. My guess is my PageRank will suddenly improve.
Bottom Line: migrating a domain with a decent page rank to a subdirectory of another domain is a bad idea and in the end, inbound links really are key to a high PageRank.