Multiple applications under single domain, in corresponding folders

Question

This is a bit unusual, but somewhat reasonable. I have a domain say mycompany.com and a sub domain demos.mycompany.com and I want to host some demo applications under this sub domain.

So I created a website in IIS (7.5) say demos.mycompany, and added 2 applications to it named demo1 and demo2 which contains a different website application, and they can be accessed via demos.mycompany/demo1 and demos.mycompany/demo2. The root website (demos.mycompany.com) loads correctly and works fine. But the problem is for demo1 which is an asp.net web api project. The problem occurs when a request to web services is made, for example demos.mycompany/api/Account/UserInfo is not found because the project base URL is changed to demos.mycompany/demo1 and therefore the mentioned web service is available at demos.mycompany/demo1/api/Account/UserInfo.

I don't know if there will be other problems with this approach. This was just the one big problem that I found, There may be other shortcomings to this.

1. Are there any suggestions to solve this problem?
2. Is there any other issues to consider before going on with this approach?