How Google defines IP delivery, geolocation, and cloaking
Many of you have asked for more information regarding webserving techniques (especially related to Googlebot), Google made a short glossary of some of the more unusual methods.
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How Google defines IP delivery, geolocation, and cloaking
Geolocation: Serving targeted/different content to users based on their location. As a webmaster, you may be able to determine a user's location from preferences you've stored in their cookie, information pertaining to their login, or their IP address. For example, if your site is about baseball, you may use geolocation techniques to highlight the Yankees to your users in New York.
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Read more about How Google defines IP delivery, geolocation, and cloaking at Google Webmaster Help.