I don't understand the sudden fad for professional companies to host their blogs on Wordpress, Tumblr, etc. It makes absolutely no sense to me. Keep your blog on your own domain as a subdomain or a subdirectory and NOT on example.tumblr.com or example.wordpress.com. Both are great services, but shouldn't be where you host your company's blog.
Can you give a reason why people should do this? We host the Stormpulse blog on Wordpress. It handles the core function of communicating with our user base just fine, and it means that I didn't have to spend any more time on it than absolutely necessary.
My counter reason: what "looks professional" is the kind of thing that makes doctors, lawyers, and real estate agents feel like they have to drive luxury cars. On the Internet, if people love your product, they don't care what you drive.
A big reason for the subdomain is that these days it's all about getting found when someone is searching for something that you sell. There is a lot of "fu" that goes into how Google decides what results to return for a given search, and how Google decides what page or site is the most authoritative for a given search. While nobody knows the exact recipe, everyone seems to agree that your domain name plays into the algorithm significantly. When you spread your content across domains, you're essentially diluting the search value you can achieve for a given query. Maybe it doesn't matter today, because you rank very high now, but that may not always be true.
The other reason is that people will bookmark your blog (if you're lucky ;) ). What if you later decide to switch from wordpress.com to whoknowswhat.com? What if wordpress goes out of business or shuts down for some reason? People will have bookmarks for what is essentially YOUR site on a domain that you ultimately have no control over. It is a bad idea to build up a resource for your company onto a mechanism that you ultimately have no control over.
Everyone who responded to you pretty much covered it. But, I'll add that integrating your blog with your website is important for a few obvious reasons: (1) keeping your blog on your own website is better user experience; (2) you can more tightly integrate the rest of your website; (3) it's better in terms of SEO (yes, SEO matters); and (4) you have more control over it running on your own servers.
By "looking professional" I mean "acting professional". Acting professional is simply a synonym for delivering a quality service, in my opinion. I'm not talking about putting on a facade here. I'm talking about taking everything into consideration, because even the littlest things affect a person's overall experience with your product.
I host both my company blogs with Tumblr but have custom domains setup and created custom themes that fit our site design so I don't really have a problem with using it. The reason we use Tumblr is so we can follow people, reblog industry things and in general interact with users more then just writing long, boring text posts.
