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Google to invest $13 billion in US data centers to boost mega expansion

San Francisco, PTI | Updated : 14 February 2019, 07:10 AM

Google said Wednesday it will invest $13 billion in US data centers and offices this year as the internet giant continues to expand across the country. The spending will build on more than $9 billion in US investments in the past year and should create the potential for tens of thousands of new jobs, according to chief executive Sundar Pichai. "This growth will allow us to invest in the communities where we operate, while we improve the products and services that help billions of people and businesses globally," Pichai said in an online post.

"Our new data center investments, in particular, will enhance our ability to provide the fastest and most reliable services for all our users and customers." Investments this year will focus outside of Silicon Valley where Google has its home, and give the company outposts in 24 states.

This will be the second year in a row that Google will "be growing faster outside the (San Francisco) Bay Area than in it," Pichai said. Google last year hired more than 10,000 people in the US, according to the company.

The internet giant is also making significant investments in renewable energy to power US operations, Pichai said.

Meanwhile, Google parent Alphabet reported quarterly earnings beating Wall Street expectations. Alphabet reported a profit of USD 8.9 billion in the fourth quarter on revenue that was up 22 per cent to USD 39.3 billion from the same period a year earlier.

"With great opportunities ahead, we continue to make focused investments in the talent and infrastructure needed to bring exceptional products and experiences to our users, advertisers and partners around the globe," said Alphabet chief financial officer Ruth Porat.

Expenses rose to USD 31 billion compared with USD 24.6 billion in the same period a year ago. "You do have to watch them in regard to costs, because their costs can drift out of line," said independent Silicon Valley analyst Rob Enderle.

"It's like they've got the goose that lays the golden eggs and their job is to spend the money," he added, noting Google's dominance of the digital ad market.

Another factor making the market wary was a 29 percent drop in "cost per click" or the average price of digital ads, the main source of revenue for the tech giant.

Google commands a lion's share of the global digital advertising market, especially when it is linked to online searches, but lifestyles have shifted to smartphones and tablets where it makes less money per ad.  

First Published: Thursday, February 14, 2019 07:10 AM
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