WordPress multisite is something similar to WordPress.com blogs option, meaning you can enable a function for users to register to your site and create their own blogs. This can be easily done when installing a self hosted WordPress with multisite option is enabled. The way users can have their blogs can be http://yoursite.com/username or by using subdomains and the format will be http://username .yoursite.com/
Important Things You Might Not Know!
By allowing users to create their own blogs some of them might add "trash" content to teir blogs and since the last Google Panda update the whole domain can be penalized by Google if the blog format is http://yoursite.com/username. To avoid this it is more then recommended to use subdomains for the blogs so Google will penalize only the subdomain if the content is duplicate, a link farm, etc. The format you should use is http://username .yoursite.com/ and this can be achieved also if having shared HostGator account!
How to: Multisite WordPress Install With Subdomains on HostGator Shared Hosting
Login to your HostGator cPanel account (http://yoursite.com/cpanel or http://yoursite.com:2082/) and create a subdomain called: *
Please note that this is an important step! By doing this you will set your HostGator account for allowing users to create subdomains using WordPress.
We assume you have a WordPerss installed already on your main domain and now all you need to do is edit the wp-config.php file and add this line of code right before the line "/* That's all, stop editing! Happy blogging. */":
Now login to your WordPress dashboard (http://yoursite.com/wp-admin/) and go to Tools - Network tab and follow the setup instructions. You can now select subdomains for your sites by using a HostGator shared account.
That's it! Your WordPress multisite enabled by using subdomains on a shared HostGator hosting account is ready and you can get traffic by third party bloggers but also you main site is safe!