When creating or optimizing a Web site you should always have clean code, relevant text and strong and relevant links. In an ideal world that would mean that search engines would produce relevant results for all queries. However, that is wishful thinking. The search engines do their best to weed out the spammers, but there are still those Web sites that practice deceptive cloaking. If you are caught cloaking in a deceptive manner, you will either be penalized or your site will be banned from a search engine's index altogether.
It is an industry-wide belief that deceptive cloaking should always be avoided. So what is cloaking and why should it be avoided?
Simply put, deceptive cloaking provides one version of a Web page to the search engines and a different version of the Web page to the visitor. This is all implemented as a server-side script. Two main types of cloaking are User-Agent cloaking and IP based cloaking.
IP Delivery is perceived as another form of cloaking but it is not considered as deceptive as User-Agent cloaking. Google even uses a similar tactic called IP Delivery when dealing with their AdWords and AdSense programs. IP Delivery is the returning of results based on the IP address. The difference with IP Delivery and IP based cloaking is that IP Delivery returns the same results for both the user and the search engines to see, whereas IP based cloaking returns one result for search engines to see and a totally different page for the human visitor to see. When IP Delivery is used without deceptive intent, such as determining in which language a Web site should be returned, there can be a benefit to using IP Delivery. For example, when a request comes from an IP address in the UK, the proper co.uk version of the Web site will show up in the search engine results. This is an example of the proper use of IP Delivery.
Matt Cutts commented in his blog on April 18, 2006 the following:
IP delivery: delivering results to users based on IP address. Cloaking: showing different pages to users than to search engines.
IP delivery includes things like "users from Britain get sent to the co.uk, users from France get sent to the .fr". This is fine-even Google does this.
It's when you do something *special* or out-of-the-ordinary for Googlebot that you start to get in trouble, because that's cloaking. In the example above, cloaking would be "if a user is from Googlelandia, they get sent to our Google-only optimized text pages.
So IP delivery is fine, but don't do anything special for Googlebot. Just treat it like a typical user visiting the site.
The bottom line is cloaking doesn't necessarily mean that you will receive high rankings, so don't do it. The search engines have to see that you have beneficial and relevant content, clean code, and strong links and then they will reward you with the high rankings you deserve.