Even within the USA, I'm surprised how few website owners have actually considered this when choosing a host.

> Also, national bandwidth is essentially free, and bandwidth to the USA is $$$.

It's generally billed at the same rate for all traffic without distinction. By hosting in the USA you assign the cost for bandwidth to users.

I'm actually in NZ, it might be different in AU, but generally when you buy colocation here you only pay for international bandwidth; national bandwidth is free.

In Australia we get charged the same rate for all traffic, except for various special cases (peering arrangements, AARNet).

The economics of our ISPs and hosts are driven entirely by the price of about 3 major pipes out of the country.

Unless you are running a gaming service, latency hardly matters for 'everyday' websites. With most people on broadband of some sort, 2ms or 160ms ping times is not relevant - they wouldn't even notice the split second delay before the page started loading.

And here's information on how increasing speed increases conversion:

http://radar.oreilly.com/2009/07/velocity-making-your-site-f...

So potentially, the money you save by hosting overseas is lost in lower conversion.

Here's a post by someone in AU demonstrating the effects of latency on web traffic - 10x slowdown.

http://mike.bailey.net.au/2010/07/latency-is-a-killer/

Fair point Steve - I was a little too broad brush in my response. Yes I agree latency matters - but I was replying to your response in the context that you proposed that business was hesitant to host overseas due to latency issues.

My reply was in line with the parent post that the (implied) reason that Aussie business are reluctant to host overseas due to ignorance of options, perceived issues around support etc. From my dealings with Aussie business (of the sort that would host at lower tier hosting firms like the one in the article), they are ecstatic just to have a website. Issues such as latency don't even come into consideration.