Does Server Location Affect Seo?

Search engines like google offer two kinds of search - search the web, which includes websites from all across the world, and search by country (search the US, or UK, or wherever you live).

If your website has a generic domain name suffix such as .com, .org, .info, .biz and so on, then google and the other search engines will deterine the location of your website by looking at where your servers are based. So if your are a US company, and you are working hard at seo to get US visitors, but your hosting company has servers based outside of America then your site will not show up in the US search results - potentially costing you huge amounts of money.

This is actually a big problem because a large percentage of hosting companies now have their servers based in India, so that they can reduce their overheads and make more profit. But they won't tell you this on their website on in their promotional material, so unless you look for it and perhaps contact them with a query you will never know about it.

If you are thinking of buying hosting then I would recommned you to check server location before anything else, so that you aren't wasting time later on seo work that can never realise the full potential of your website. If you have a hosting account already then it is defintely worth looking into this issue because changing to a different host isn't a difficult thing to do.

Having your website hosted on US server does no necessarily need to cost you any more money than you would pay to a company which exploits cheap Indian IT labour, you just have to find the right company.
My recommendation would be to go to Hosting-By.Us who specialze in offering US based hosting at the same price you would pay for a foreign service. They are also very reliable and have a good range of freebies (like free domain names and scripts).