We have a client that has multiple top level domains for the products they offer. These products are different full fledged softwares. They also have a domain for their actual company that makes these products. We are consolidating their sites so that all of them can be managed by one backend. One of our developers suggested to consolidate even more by moving their product tld's into sub domains of the company site.
So instead of this:
http://company.com
http://product1.com
http://product2.com
http://product3.com
http://product4.com
It would be this:
http://company.com
http://product1.company.com
http://product2.company.com
http://product3.company.com
http://product4.company.com
They like their current spots they have on search engines for each of these tlds. What consequences would happen they were to move them to sub domains. How (if any) can we prevent these consequences from happening? Or is it better to keep them separate tlds?

Comments
It's obviously easier to
It's obviously easier to manage all of them under the same Drupal installation. To do this they don't necessarily need to be on the same domain, just can live separately in sites subdir.
If you decide to go for 2nd option from SEO perspective make sure you don't abandon old names (productX.com). I believe just redirection to a new path will be enough.
I wouldn't do it
Even though, in theory, just using a 301 redirect from the old domain to the new domain should work, I wouldn't do it for established domains that are happy with their rankings and traffic. It is risky since 1) they may screw something up so the domain doesn't get redirected properly and no one notices for awhile and ranking is lost, or 2) perhaps Google won't transfer the ranking as expected (though it should).
Since there is no benefit of having subdomains over regular domains (they are all considered different domains) and you can configure your settings to use either configuration with Drupal, I would stick with the current domain names.
Good luck!
Kristen
Drupal Blog: http://kristen.org
Drupal 7 Multilingual Sites: http://kristen.org/book
Probably too late, but...
I agree with Kristen - Google will handle 301s efficiently when 301'ing an existing domain to a new domain. My experience with doing this has been 100% positive. We worked with several massive brand websites to consolidate some of their smaller domains into the main company branded website. Worked like a charm.
For your sub-domains, you can stick with that format without issues. However, company.com/product1 will also work well, as both are considered only one sub-directory under the root. In my opinion, consolidation is WAY better than managing 4-5+ individual websites and also strengthens social media and SEO campaigns moving forward versus 4-5+ websites.
SocialSEO.com
http://www.socialseo.com/