IP addresses are like telephone numbers for web browsers - they tell the web browswer where to go to find your website. The format of an IP address is four blocks of numbers of 0-255 e.g. 74.54.75.210. The third portion of this address is called the Class C block.

Search engines like Google sometimes look at the Class C values of an IP address in order to determine if a site comes from the same server. Sites on the same server do not always have as much "voting power" when they link to eachother. Google often gives preference in voting power of a link to sites that it assesses to come from different businesses.