There are a few cases where hosting a blog alone makes sense, but it's a rare situation and of course does little to grow authority of the main domain.

Blogging helps with the authority of the main domain, if you have more traffic coming in thru blogs, google may weigh the blog as the authority, but for now the branding is key.

I would prefer to have the blog hosted on the main site, and thus adding more content and weight to the domain.

Having external blogs on Blogger etc is also a good idea, but I would doubt I would ever really host a blog on a seperate website than what I am trying to promote.

I think the point about your content suffering when you maintain 3 or 4 blogs just for link building is right on.  Blogs are already having a tough enough time producing quality content for 1 blog, 3-4 blogs just waters it down.

I agree with Scott  - In most cases separating your blog from your domain is a waste of potential authority HOWEVER it's not always bad advice

Here is an example:

You have a site  buy{product}onlnie.com and its obviously a commercial site - which many social experts know won't fly well with diggers and other social users when they see the items link to buy{product}online.com/blog. So its better to create a separate blog which is more attractive in the blogosphere and social networks and brand through it without being pegged as a spammer on digg and other sites. Of course even in a case like that I would recommend a catchy name and a different design rathern than just appending blog before .com

*** In a case like that the benefit to blogging would be more about traffic and branding and less about passing authority to the commercial site. The blog itself would just need to be optimized to push a conversion or brand. It would allow the company to continue to focus its core site like a giant online ad and give its seperated blog the opportunity to benefit as a blog.

Robert,

A good valid point. It's true an online store for example with a blog will not fly well in just about every social site (cirlcle) out there. Good perspective.

I have to disagree with the point of view of the writer. Typically, I don't find link baiting worth it for most business sites, its to slow, you have no control over the keywords, and what often gets the most attention are things that seem unprofessional.

Blogs dodge that bullet entirely. It puts the link keywords back in your control. I don't trust anyone besides myself to make sure proper links exist. Trying for that I think is flawed logic, and can often have interesting side effects (like a subdirectory outranking the index).

Again, I'm not saying to frogblog, or that this method is best for every website, but we do know google will credit the blog with the inbound link. Not only that, you suddenly have blogs that can offer more links to more projects, or even link swapping.