Sub Domain through IIS

Hi all

I have a CMS Website1  done using Umbraco 4.7 and deployed through IIS. http://localhost:502/   It shows fine.

I also have a CMS WebSite2 done using Umbraco 7.6 and deployed through IIS. http://localhost:507/ which works fine.

I get IIS error when I am trying to make website 2 as a subdomain of Website 1 by adding an application through the IIS Manager.

I need the url to be like  http://localhost:502/WebSite2

How can I do this?

Thank you