Regional target market using a .net

Want to follow the rules of the game to avoid destruction.

[Wired2Mac]

Need to know a bit more of the laws of the land and seeking advice please.

There is a website which we will call “xyzinc.com”, however a regional branch of this business wants to use “xyzing.net”. Xyzinc.net would like to make use of the .net address xyzinc.net to strategically be placed in another regional location (would be like opening a branch office in another state, but virtually).

Goal is to be a valuable competitor in that regional location and achieve high engine ranking.

Here is the situation:
1.) It is important to honor brand consistency in xyzinc.net to the .com site version. However content theme will change to fit into the regional area and support its target market.
2.) There will not be any internal cross linking between both the sites (at most 1 link back over to the .com site.)
3.) Services will be the same but again themed and targeted to that region.

Questions:
Can this be done and still succeed well in the search engines? Will it or could it be viewed as spam? Where do search engines stand on this, and how or what advice does anyone here have to offer.

*

[eboda]

Try this post:
[webmasterworld.com...]

Attention to Brett_Tabke comment.

Though this was back in 1999 I wonder if this is still valid?