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I am working on a website which caters to both English and French users. Client is currently serving both the French and English content on 1 URL. For ex - www.example.com is English but it has French button, when we click on it URL never changes only the content is flipped into French. Same is happening for all the pages.

Question is how it effects SEO, is it a good practice? Any effects on rankings or how does Google know which version to show to the respective users without defining hreflang tags.

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Googlebot only recently started crawling with an Accept-Language header that would even allow Google to index the same URL under two different languages.

Even now that Googlebot can crawl both languages correctly, I don't know of any site that has been successfully indexed that way in both languages. Google has a help document about this crawling mechanism with a big red recommendation at the top of the page:

IMPORTANT: We continue to support and recommend using separate locale URL configurations and annotating them with rel=alternate hreflang annotations.

At this point, I would consider using a single URL "experimental" and "not well supported". See How should I structure my URLs for both SEO and localization? for information about the best ways to make different URLs for different languages.

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Strictly speaking there is no issue with doing it this way and many sites do it the same way as you and define the language based on cookies and not URL however best practice, and the way that Google recommends, is to use either a directory structure or a sub-directory option.

IE: http://www.domain.com/en/page.html http://en.domain.com/page.html

And on each page you use the alt hreflang tags to define the addresses for the translated pages. This part is important so that you don't get penalised for duplicate content and it also helps Google identify the right version of the page to serve to the end user based on their preferred language.

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It depends on how many users do you have on website for each language.

In this case, you have one domain for the both languages and it is probably fine this way. Only if you translate the website into many languages should you start thinking of switching to using specific top-level domains. If you do have lots of users on the second language (probably this is French), when they type example.com, you could think of redirecting to .fr domain.

Google is probably able to observer that users use both languages, especially if they use Chrome. So Google would probably direct users to the version the user needs. It is only your (or client's) preference to decide if you are over the capacity for using one website for both languages to add a new domain for the .fr users.

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