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It seems to be official, Google is hosting in South Africa, or at least some caching services.

With many rumors running around for many months, I've been able to physically see Google behind a local IP.

With the story http://mybroadband.co.za/news/internet/12281-Googles-local-network-presence.html showing http://www.google.co.za behind IP http://196.23.168.147/ it is possible to do http://geoiptool.com on this IP, and it is shown to be an IP in Pretoria.

More interesting is the reverse DNS for this IP that returns "za196-23-168-147.cache.googlevideo.com" which could mean many things.

For me the question becomes how this would be available when ADSL caps are reached and one gets limited to local only access. Will we then still get some Google services?