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Possible Duplicate:
Local SEO Strategies

The new feature on google search which uses local search (like users City), how do we make sure our website is hosted in other countries but content/location is specific city.

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Hosting location has little impact on results. The easiest way to localize a website in to claim the Search engine local listings (Google places). You can also put geo locate meta tags in for smaller vertical search engines.
Also, just because you see a local city search in USA does not mean the country xyz has that option. Google's web pages are different around the world.