Every computer on the Internet has an IP address. Your computer, your web enabled phone and the server that hosts your websites all have IP addresses. They usually look something like this:
As you see above, there are 4 sets of numbers separated by dots.
The first set of numbers is the ‘A’ class
The second set is the ‘B’ class
The third set of numbers the ‘C’ class
And finally the fourth set is the ‘D’ class
Something a bit like this:
Inside data centers where your server is located related servers or websites are often hosted by servers with the same ‘C’ class of ips. So their ips might look something like this:
The search engines know this and can spot when related sites cross link to each other from within the same class C ip address. These links are often filtered out of the ranking algorithms. If your site has too many of these types of links it can even bring a penalty to your site.
That’s why a few companies came up with the idea of “SEO Hosting”. This is where they will sell you hosting on completely different sets of class C ip addresses. People often use this to hide their mini site networks, blog “farms” or cross linking networks.
Keep in mind that Google can also see your contact information for your domain. So if you go through all the time and expense of setting up this type of hosting it would be silly to use all the same contact information on your entire network. That stands out like a sore thumb to Google.