Local search is becoming popular day by day; it is often said that search engines give higher importance to the websites hosted on local servers. Therefore, to do well in local search engines, go with a local host who has their data centre in your country. If you are from UK, look for web hosting UK only. thus it is highly recommended to have website hosted in same country you are targeting.

Host in UK if your target market is UK. If your target market is global, or located who knows where, find a location that works best for your visitors. Don't ever make the search engines the primary worry when making decisions for your site.

Also, if you are running global, get two or three or four websites and host them at the various countries and market them individually. Not only will you help the local engines, and allow faster times for people from within that country (and surrounding locations) but you will also get 4 domains listed in the primary google index Just be sure that the content on the sites are different.

Location DOES matter. Just like if you're a bar in Los Angeles that is advertising to local clientele you likely do not want your servers in Florida as there is a longer connect time.

Google does look at GeoIP, however if you have a strong enough marketing campaign and you tweak your webmaster section in google, you can override whatever location your machine is in and target a specific market.

Done daily

I would like to say it in this way!! You could find the local hosting provider with the servers hosted locally at the data center. If you really can't find the hosting provider with local data center, you may consider to find the closer countries data centers. The most important thing is how reliable for the hosting provider.

I didn't know that GeoIP is that important with search engines. But I do believe that strong marketing campaign can override almost any other specific thing.

I jusst started noticing this with searches in Google. The adwords ads on the right side would be geared toward the state I am in. This makes good sense for search providers in that they can now market even more specific markets. Everyone's definition of local may vary too, I know my servers are about 1000 miles from my current location, is that local?

Local enough for me ... we host servers from all over the world.
I'd agree, given that all other factors are equal - price, quality of the bandwidth, uptime of the provider, support and so on.

I guess the server location only matters when it comes down to network latency. If you want local visitors, I do not believe you need a local DC unless people really complain about your site speed being very low due to the location of your server.

I think US datacenter location mostly attract global customers.

I think US data center location is very good.It is stable.