According to Vanessa Fox, an ex-Googler, absolute urls (e.g. "http://www.domain.com/index.html") are better than relative urls (e.g. index.html) for two reasons:
1. Easier for Google to resolve canonicalization (non-www vs www; one common cause of site problems). Inconsistent urls (some urls pointing to "www.example.com" and some pointing to "http://example.com" can still sometimes make Google think you got 2 sites instead of one; and those 2 sites will rank lower than if you only had one site because you're splitting backlinks).
2. You get link juice when your blog posts get scraped (you already knew that, right?)
A quote by Vanessa in the same blog post regarding internal link structure (irrelevant but I don't wanna start a new thread):
Quote:
My experience has been that if you have 10 pages on your site, all about the same topic, but those pages are scattered in various directories and randomly linked, those pages are just as likely to rank for the topic as they would if they were all grouped into one directory and linked categorically together. The important things seem to primarily be things like keywords on the page, anchor text, and relevant links.
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