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I have read that hosting location does effect search engine rankings. I thought the effect would be small but I was wrong.
I have noticed on one of my larger sites that is hosted in Canada that searching (I live in New England) in google[.]com that for a competitive term that the site ranks 8 but on google[.]ca the site ranks 5. 3 positions can be huge for traffic. It looks like I need to plan for a move of the site to a US based server. I'll update this thread when I do the move and let you know if it does effect its rankings in google[.]com.
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