G'Day.
The only thing that seems to make a differrence is the axtension .au --- check out my own website
www.misterballoons.com.au it is hosted in the US but rates highly in
www.google.com.au [try the term balloon twister on "pages from Australia"]
As for
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Looking at google.com.au and selecting 'Pages from Australia', it appears that there are many more .com.au pages listed than .coms. Is this because there are simply far more .com.au sites in Australia than .com ones? Or is Google.com.au giving priority to com.au domains?
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you have to understand that there has been reasonably tight restrictions on getting a .au domain, and there has been media promotion [in the past] in Australia to the effect that .au domains are "more trustworthy" because you are dealing with an actuall company or existing entity not just anyone who registered a domain. So if anyone, like myself, wants to do business in Australia it has been important for rankings and credibillity to have a .au extension.
Another reason that the .au domains are so popular here in Australia is that it has been recognized by the Australian public as a guide to finding products and services that are already "on our doorstep" and not half way around the world. This makes after sales service seem more readilly available, and saves purchasers from the imposition of "duties" as their purchase arrives in the Australia, and of course shipping time and costs are greater from the US than from say Sydney.