SEO Tip #90: Does the Number of Subdirectories In A URL Affect Its Ranking?
Matt Cutts: The answer is there is virtually no difference what so ever. Think about things in terms of PageRank; usually the root page of your site is what has the most PageRank. That is where everybody is linking to. That’s the thing they all care about and usually link to. So if you take a page on your site and you link to your root page directly that page will get a little bit of PageRank as well.
Whether that pages is at a high level or a low level in the directory doesn’t change how much PageRank it gets. Now I can’t speak for Microsoft or Yahoo. I don’t know how they treat things. I’ve heard rumors that they look at the number of levels and certainly for usability, if you can make things relatively close to the root page that can be nice.
But certainly within Google I wouldn’t worry very much at all about whether things were at one level deeper or at the root level or something like that. I think it can be very helpful for users if you have a sub-directory, where you might have /search or you might /reviews or /products and you can have things within that sub-directory. That can be a great thing for usability and I definitely recommend having your site categorized in some sort of way like that.
But as far as something that just says aha there are one or two extra directories therefore your rankings get lowered, I wouldn’t worry about that at all. It’s really not a major factor in Google search engine rankings.