A shared web hosting service or virtual hosting service or derive host refers to a web hosting service where many websites reside on one web server connected to the Internet. Each site "sits" on its own partition, or section/place on the server, to keep it separate from other sites.
Generally speaking this type of hosting is suitable for WordPress but may not be suitable for Magento as Magento often needs more resources than shared hosting can offer.
There can also be issues dependent on the ip configuration of your web space as others can adversely affect your positions in search especially if they misbehave I.E. send spam email or create spam link networks to help gain positions in search.