From this Google Webmaster Central blog entry:

Does location of server matter? I use a .com domain but my content is for customers in the UK.

In our understanding of web content, Google considers both the IP address and the top-level domain (e.g. .com, .co.uk). Because we attempt to serve geographically relevant content, we factor domains that have a regional significance. For example, “.co.uk ” domains are likely very relevant for user queries originating from the UK. In the absence of a significant top-level domain, we often use the web server’s IP address as an added hint in our understanding of content.

That pretty much sums up why you would want to host a website on a server inside the country where its primary audiences are, especially when obtaining an appropriate ccTLD is less than trivial.

That is also the main reason why I rent web hosting space in Australia. Not that I am patriotic, nor because I want to protect the local business, and it has nothing to do with a having local number for support. A latent SSH session can be frustrating sometimes, but from a visitor’s point of view there is virtually no difference between a server in Sydney and a server in Los Angeles (unless you have 300 scripts and images that need to be loaded sequentially).

The thing is, there is too much restriction on getting a .com.au domain. According to auDA domain name eligibility policy (under Schedule C & E), to get a .com.au/.net.au you need to have either an ABN (Australian Business Number), or an ACN (Australian Company Number), or a registered business name, or a trademark owner, or… Basically an average Joe like me just cannot wake up one morning with a terrific idea, and then just go to any auDA accredited registrars and grab the .com.au domain.

Take the last .com.au I got for example (and the only one I’ve got). I wanted to register an ABN as it is free (but need to do extra stuff for tax). However I cannot “trade” under the name I want unless I have filed a business name registration which is $142 to the NSW government. Oh man I just want a website.

I understood that the current auDA policy is meant to prevent the cybersquatting mess that we have with gTLDs like .com and .net. However it does not stop domain monetisation companies like Boomerang from exploiting the back-doors and snap up all the other nice .com.au domains.

Anyway. That is my little rant on the whole domain registration business in Australia. Currently auDA is reviewing the name policy, which might open up 2TLD (so you can register <anything>.au) and also buy/sell .au domains (currently you cannot although there’s always loopholes). If .au really opens up, my prediction would that

• It would turn to another mess just like .com/.net/.org where the majority of <keywords>.au are registered for domain monetisation purpose with no real content.
• Webmasters migrate from Australian servers to US/Europe servers for Australian content.
• Less demand for Australian web hosting service means even it might become more expensive.

Then again, there might be more patriots and local-business supports than I have guessed. But we’ll see.