One of the common misconceptions about the internet is that location does not matter – well that’s not really true.
Currently when you use search engines to find information they try to return results that are appropriate or relevant for where you are geographically – for example searching for election results in the UK you not really interested in search results from the USA.
All search engines use a mixture of techniques to work out if a website has information that is specific to a particular country – the two main factors are the domain (i.e. .com & .co.uk etc.) and the physical location of the servers (what country the website is hosted in).
There are two types of domain on the internet, the generic “top level domains” such as: .com, .org, .net .coop etc. and country specific domains (.co.uk is the UK domain.)
Google and other search engines will use the “top level domain” to work out if your site is appropriate to the search, however if you want to target the UK and your site is for example a .com, search engines will use the physical location of the servers which host your site.
The problem is if you have a .com site (as opposed to .co.uk) and it is hosted on a server in Germany (if you are hosted with 1and1 that’s where you will be, sometimes a hosting company will be UK based but use foreign servers) you won’t rank well at all in the UK searches on Google.co.uk, yahoo.co.uk etc. because they are being asked to return UK pages.
In this example the search engine decides you have a dot.com so it need’s to check your location, it then finds your root location to be Germany or the USA and decides not to rank you for google uk searches.
So it is vital if you are targeting a particular market that you either have a country specific “top level domain” or locate ‘hosting’ in the country (doing both is even better).
Google have some advice on targeting country specific searches.