I have reviewed 2 sites in a row with hosting that is outside of their own countries. I understand that price comes into play when deciding who to host with, but try and think of your server’s location like a window shopping gallery. You wouldn’t want your high end boutique clothing store to be in the middle of a corn field in Idaho would you?
The same goes for your hosting, your server should be where your customers are. If you happen to have clients in multiple countries you may want to consider multiple hosting locations to take care of your local clientele. Latency between the client and the search engine are taken into account when rankings are calculated. As well as which local search to place you. If you happen to own the local TLD of the country, this is less of a problem. For example, if you have a site hosted in the US and have a co.uk address it will be easy for Google to determine which local search to display the results within.
In most cases it does not make any sense to host a UK site in the US, unless all of your data centers are in the US and it would be very expensive due to the size of your business to re-locate. If this becomes a problem a possible option would be to use a PROXY server, this will allow you to funnel your traffic to a local server, say in the UK and have a direct pipe back to your data centers in the US. Usually this will reduce the load time of the client as well depending on how big your pipe is. Undoubtedly this will raise your hosting costs.
I personally struggle with the large data center issues on a daily basis and wish I could have local hosting. Just so you are aware Google has data centers all over the world, its very easy for them to tell how bad your response time is! I have found that my sites rank better with lower latency levels.
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