I read an interesting article in the latest Economist entitled "The revenge of geography". It's premium content, so you have to go buy the magazine to read it, but the main point:

"It was naive to imagine that the global reach of the internet would make geography irrelevant. Wireline and wireless technologies have bound the virtual and physical worlds closer than ever"

By associating users' IP addresses with geographic information it is possible to locate them physically with a fairly high degree of accuracy, and thus websites can decide which language to display, whether to allow people to gamble on casino sites, and most importantly, to target advertisments. Furthermore, websites that are mostly relevant to a particular city or region can be identified readily when conducting a search.

I found a rather neat resource called "GeoURL" which is a database of the longitue and latitude from which people maintain their websites. Click the little green box below to learn about websites geographically close to this one: