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So my question is, will hosting our site in Australia on a .au domain rank it higher than relying just on subfolders? If it was me, I would. By having that extension you are stating clearly what your intended target area is. Additionally, this could save you money if you do run local country ads, due to the ads being of higher quality and relevance. Just be very careful that you do not have duplicate content index-able across multiple sites. Make it unique for each area and country