WebReference.com - Part 2 of chapter 5 from Information Architecture for the World Wide Web, 2nd Edition. From O'Reilly (2/5).

When designing taxonomies on the Web, you should remember a few rules of thumb. First, you should be aware of, but not bound by, the idea that hierarchical categories should be mutually exclusive. Within a single organization scheme, you will need to balance the tension between exclusivity and inclusivity. Taxonomies that allow cross-listing are known as polyhierarchical. Ambiguous organization schemes in particular make it challenging to divide content into mutually exclusive categories. Do tomatoes belong in the fruit, vegetable, or berry category? In many cases, you might place the more ambiguous items into two or more categories so that users are sure to find them. However, if too many items are cross-listed, the hierarchy loses its value. This tension between exclusivity and inclusivity does not exist across different organization schemes. You would expect a listing of products organized by format to include the same items as a companion listing of products organized by topic. Topic and format are simply two different ways of looking at the same information. Or to use a technical term, they're two independent facets. See Chapter 9 for more about facets and polyhierarchy.

Second, it is important to consider the balance between breadth and depth in your taxonomy. Breadth refers to the number of options at each level of the hierarchy. Depth refers to the number of levels in the hierarchy. If a hierarchy is too narrow and deep, users have to click through an inordinate number of levels to find what they are looking for. The top of Figure 5-12 illustrates the narrow-and-deep hierarchy in which users are faced with six clicks to reach the deepest content. In the (relatively) broad-and-shallow hierarchy, users must choose from ten categories to reach ten content items. If a hierarchy is too broad and shallow, as shown in the bottom part of Figure 5-12, users are faced with too many options on the main menu and are unpleasantly surprised by the lack of content once they select an option.

There are roughly 50 links on Microsoft's main page, and they're organized into several key groupings:

These 50 links are subdivided into 8 discrete categories, with 4-8 links per category.

In considering depth, you should be even more conservative. If users are forced to click through more than two or three levels, they may simply give up and leave your web site. At the very least, they'll become frustrated.