It is a great way for webmasters to tell Google more about geographical location of business associated with website. Country association has impact on search results. Visitors from particular country will see more websites associated with this country in search results. At the same time country oriented searches (for example, restriction ‘pages from Canada’ in Google.ca) will show websites associated with particular country only.
Search engines can determine the location by using top-level domain names. For example, websites within top-level domain .ca are associated with Canada. Situation with not country specified domains is different. Search engines can use hosting IP address to determine the location of hosting server and associate it with domain. It is not the best way because many websites have country related or language oriented sections in sub-domains or directories.
Now you have an ability to show Google geographical location you would like to associate with your website. Basically, you need an account in Google Webmaster Tools.
After login you can go to Tools –> Set geographic target.
There is a form to select country/region, put street address, city/town, state, zip code. You can specify geographical location for entire website, particular sub-domain or directory. It is very useful if some parts of websites are oriented on visitors from specific countries.
Please note that in field City/Town you have to use upper case characters only. And field State should have text code of state or province (for example, HI for Hawaii). If you put full name of state (for example, Hawaii or HAWAII) you will see “No such State/Province in this country. Please enter a valid State name (or Province name)”. It is weird but this is way how it works.
This new feature is a big step for Google to allow webmasters provide more information about websites. However, some websites (or sections of websites) are language oriented. Would be great to have an additional feature to associate a website or part of website (sub-domain or directory) with particular language.