Google: $597 Million in CapEx in 1st Quarter
April 19th, 2007 By: Rich Miller
While most blogs are writing about Google’s eye-popping revenue numbers for the first quarter of 2007, here at Data Center Knowledge we seek out the numbers for capital expenditures. Revenue is good. But how much is Google investing in its data centers?
Once again, it’s a big number. Google reported capital expenditures of $597 million for the quarter, its biggest quarterly capex investment since the second quarter of 2006, when the company spent $699 million. For comparison purposes, Google’s capex was $492 million and $367 million in the third and fourth quarters of 2006, respectively. Here’s what CFO George Reyes had to say in the conference call about this quarter’s capex number (full transcript at Seeking Alpha):
While there were some real estate-related expenditures as in prior quarters, the majority of our CapEx was related to IT infrastructure investments, including data centers, servers and networking equipment. As we have discussed previously, we expect to make continued significant capital expenditure investments to drive the growth of our business as these investments have contributed tremendously to our success to date.
CEO Eric Schmidt also had a brief but noteworthy comment about the company’s investments in infrastructure and engineering:
We are also way, way investing in engineering because we believe this is a time where our model is scaling. The products that we are going to bring out in a year or two are going to have huge impacts to the investments we’re making in data centers, and we need the engineers to build the great products to do so.