Drupal allows you to run different Web sites from a single instance of Drupal files on your Web server. You could, for example, run two Web sites example.com and mysite.org from the same code base, with each site having its own database. To create multiple sites, you simply create a subfolder within the Drupal folder sites. These site folders must have the same name as the domain names they represent. For example, the domain name example.com would have a folder named sites/example, com. Each of your site-specific folders will contain a file named settings.php as well as a subdirectory to hold site-specific modules and site-specific themes. If you would like a module or theme to be available to all sites, use the folders sites/all/modules and sites/all/themes, respectively. Do not place downloaded modules and themes into the Drupal core directories. Keeping the Drupal core pristine will make it easier to perform security updates.
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