Factor:The physical server location, where a website is hosted is important to search relevancy. For example, country specific search engine use the websites server location to determine its relevancy to those specific regional search engines.
Impact:Websites that are hosted within the United States are generally determined as being a US based website. At the same time, websites hosted within the UK are determined as being from UK.
An example, a website created for the UK audience that wished to be ranked if the physical server location is in UK as well, as opposed to another country.
Take Action:My recommendation in that a website be hosted within the respective country of its targeted audience, in order to increase its likelihood of being ranked by the search engines severing that country.
I would also, if not already sign up for (
Google Webmaster Tools) which enables you the website owner to specify information about where the site is located, and Google will use this information as a signal in ranking.
By signing up for Google Webmaster Tools you receive much more information that will aid in your quest to understanding your sites ranking and search information.
Cheers!
Benjamin Burns