Set up multiple niche sites or 1 containing multiple niches?

Hey All

I was wondering would you benefit from setting up an individual site for each niche or setting one site and having a completely different niche in it's own category?

For example

genericwebsite[dot]com
genericwebsite[dot]com/niche-1
genericwebsite[dot]com/niche-2
genericwebsite[dot]com/niche-2

And then within each niche you add multiple articles specific to that niche with backlinks to relevant categories.

Would the above set up work as good as having different domains for each niche?

In understand that if it gets penalised, the whole site will be hit so keep it as clean as possible but I'm thinking purely from a cost saving exercise.

What are you thoughts?

Thanks

Good. If you can able to do run a website with multiple niches then you can sure to go with it, and the google doesn't penalize if your site looks natural. So make sure your links are from the quality websites and relevant to the categories. Good luck!

SEO Pearl said:

Good. If you can able to do run a website with multiple niches then you can sure to go with it, and the google doesn't penalize if your site looks natural. So make sure your links are from the quality websites and relevant to the categories. Good luck!

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I was wondering if it would have a negative effect on the ranking, I would assume that a larger site would look better to Google.

I'm thinking of keeping it as clean as possible with some layers in between (a couple of web 2.0s)