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Fairly simple question - I've seen it posted that to rank in UK engines (and UK versions of the big engines) one should host in the UK as well. I don't know how true this is, but I have the same question, but related to S. American countries, specifically Chile.
Anyone know if sites should be hosted in Chile in order to perform well in the Chilean version of Google and other Chile-specific engines.
Gracias (as it were),
This suggests that definitely some sort of geo-targeting is in play and therefore a local host would definitely be an advantage if you want to specifically target the local population.
A general advice would be to host your stuff locally. At least that's the consensus in most European countries and as WebWalla points out, it seems it would be a good idea.
You could maybe try to contact 2_much [webmasterworld.com] as she's in the know about SA. She might be able to help you out, but don't hold your breath ;)