Physical location of server - does it really make a difference?

[AnonyMouse]

I'm about to launch a site that targets a service in a specific country (in fact, a specfic city, but country will do).

My server is physically located in a different country. I've heard that geo-targeting implies that I should instead host the site in the same country as the target audience.

Somehow, I can't quite believe that in the globalised world of internet hosting, Google would be so asinine as to apply a filter like this. Surely choosing a host elsewhere who offer a better hosting deal shouldn't affect your position in the SERPs? Thoughts?

[Pico_Train]

It does matter and so does the tld or cctld you chose.#

If you are in Germany, a .de with a German host will have an effect.

I am in South Africa, a .co.za hosted in South Africa did make a difference.

See what others say but good luck!

[pp46]

This was a concern of mine for a long time, now after more experience and time I would say that for sure, it matters. To what extent I am don't know but IMO its much safer to do the obvious, host the site in the same country.

[The Contractor]

It is not based upon physical server location, but who owns/registered the IPs.
(hard to explain without an example)

Example:

I have a dedicated server located in a Dallas, Texas datacenter. The hosting company which manages the box is located in Canada. The IPs are registered to them. If you go to google.ca and do a search checking the radio button "pages from Canada" - the sites on the server will be shown in the results. Even without checking "pages from Canada" the sites rank higher on google.ca than on google.com for the same terms.

[Pikono]

From my experience, it matters a lot.
Last year I moved my site from UK host to US host and lost 80% of the traffic although the site extention is .com

[moftary]

It matters, but as The Contractor explained. IP talks!

However, I want to add that if your site IP belongs to a UK network, your site would be rewarded in google.co.uk BUT I haven't noted any loss on traffic in google.com itself.

Cheers,
Hossam