It is very important to know the difference between shared ip and dedicated IP addresses when finding a web host. Some websites don't need a unique IP address and can function just fine on a shared IP. Many times though a dedicated address is preferred over shared IP addresses.

What's a Shared IP?
Every domain name that is home to a website has an IP address assigned to it. An IP address is the real address of a website or server. Domain names were developed because it is difficult to remember long IP numbers like 234.123.66.7. Usually, in shared hosting where there are hundreds of websites sharing one server those same sites will share one single shared IP address.

For the hosting company this simplifies the technical aspects of hosting your website. Instead of having a dedicated IP addresses for every domain, they can all share one IP address. This makes it easier for them to manage and maintain the servers.

The downside to shared IP's is that if someone sharing your IP happens to get in trouble for spamming or scamming, your IP can get banned or blacklisted. You may not even know it until your site disappears from the search engines or your email start getting blocked by ISPs. In shared hosting the actions of others sharing the server can effect your site and cause problems.

What's a Dedicated IP?
Most larger websites or ecommerce enabled sites have a dedicated IP addresses. This means that your site is the only one on the internet using that unique IP number. For example, if you typed 209.131.36.158 into your web browsers address bar you would see Yahoo!'s website come up. This is their unique IP address and no one elses. This is their own address on the web that has been attached to the domain name yahoo.com.

If you have a business oriented website then you probably will need a dedicated IP address for your site. Especially if you have a merchant account and accept credit card payments on your site. You can't even get an SSL certificate for your website until you have a dedicated IP address. You can get around this by using a PayPal shopping cart or something else hosted off your site. But, most people don't like the idea of sending the customer to a new address to close the deal.

There is also the SEO or search engine optimizations concerns to consider. Many people have found that sites with a unique IP address do mysteriously better in the search engine results than those utilizing shared IPs. Often times security concerns drive people to upgrade their cheap hosting account to include a dedicated IP address.

The bottom line is that both shared IPs and dedicated IPs can be useful depending on what kind of website you own. The key is to do some research and find out which one is right for you. There are rumors circulating that eventually we will run out of unique IPs under the current system and a new address or IP system will be necessary. Even today, most hosting companies charge a premium if you want to upgrade to a dedicated IP.