The short answer is, yes, the physical location of the web server your website is hosted on can slightly determine how well your website will show up in search engine results.
Whoa, wait! Don’t go crazy and start changing your web hosting to other companies based on where their servers are located.
Here, let me explain.
Google Wants To Be Relevant & Knows Where You Live
When someone types a search query into Google, Google wants their search results to be more relevant to what you want and need than any of its competitors.
One of the things Google will do (as do other search engines) is look up the IP address of the person who typed a search query in their Google Search.
Your IP address tells Google where your computer’s modem is located; say Las Vegas, NV USA.
What Google also knows and stores in its database are the locations (IP addresses) of web servers. That is, the computer which your website or blog sits on which your web hosting company uses, also connects to the Internet through a modem.
So just like your computer at home has its own IP address, so does the computer (or server) your website’s files are on.
What Google will do then, from my experience, is consider that if the Google user lives in Las Vegas and is searching for a landscape company, it will take into consideration a landscape company’s website which might be hosted on a server in the same city or surrounding area.
Now most of you who run a blog probably aren’t trying to geo-target your customers in one specific location down to which state they live in. You’re probably looking more at either targeting a specific country or anyone worldwide.
And if that’s the case, I’d suggest choosing your web hosting company based on things like the services and products they provide as well as other factors like pricing and technical support.
I would, however, keep in mind that if my primary audience is located in a specific country, I would try to find a hosting company whose servers are located there. Not super important, but would be nice.
Of course if you plan to host a blog, you might want to take into consideration how well your hosting company knows things like blogging and WordPress so you can ask questions aside from the technical aspects of web hosting.
So in conclusion…
Yes the geo-graphic location of the web server your site is hosted on has a small impact on how well your website will show in local returned search results.
*Bonus Tip: If you plan to target your readers or customers by country location, you can tell Google where your customers are by using the Geographic Targeting option inside Google’s Webmaster Tools.