We know this but the local merchant doesn't. Local search guru Greg Sterling summarizing his recent Search Marketing Now webcast includes this question and answer from the webcast.
Q: If I search for a "dentist" with out any geo qualifiers, it is my understanding that the search engines now use the IP of the router to deliver results (businesses) within that region. True?
"Yes, all the major search engines are using IP targeting to serve ads when they can sufficiently identify the computer's location and they "infer" the user is conducting a local search. It's a fairly safe bet that queries such as "dentist," "lawyer," "plumber" or "sushi" are local because they are typically "fulfilled" locally. Google, for example, will serve a mix of local and non-local ads in such situations. And on Yahoo's Panama platform, local ads, with local content, will potentially get a higher quality score than more “generic” national ads."
The webcast was informational and well worth an hour spent. Honestly Greg could have filled 2 hours easily I feel. So much happening in this space.
I highlighted this particular question because I when I present this issue to prospective customers they are generally surprised and often express doubt.