I have a asp.net website in the IIS which is available on internet as www.xyz.com now I have been asked to prepare another website which will be accessed via www.xyz.com/abc.
For this, do I need to create a virtual directory under the website folder XYZ in IIS? or is there any other way to achieve this.
You need to make the subdirectory an IIS application.
Keep in mind that inner apps like yours will be inheriting configurations from the top-most web configuration, so be careful clearing those settings you don't want in the child applications.
Yes a virtual directory will work, however note that if abc is a full-blown app you will have to add it as an application not as a virtual directory
