Google Buying Land for Future Data Centers
July 18th, 2011 By: Rich Miller
Google continues to invest heavily in its Internet infrastructure in the second quarter of 2011, recording capital expenditures (CapEx) of $917 million. Significantly, Google said some of the spending was for related to “land and building purchases” along with the usual data centers, servers, and networking equipment. While spending on buildings could be tied to Google’s expansion of its office space, vacant and purchases most likely reflect future sites for data centers.
Urs Hoelzle, Senior Vice President of Operations at Google, said last month that the company expects to build one or two more data centers n Europe, but provided not timetable for that expansion. The company has not announced any new data center projects in North America.
Google’s CapEx spending was about $27 million more than in the first quarter of 2011, when it invested $890 million in its infrastructure. That makes it the the second-highest total in its history, trailing only the $2.55 billion Google spent in the fourth quarter of 2010, most of it related to the purchase of 111 8th Avenue.
- 1Q 2007: $597 million
- 2Q 2007: $575 million
- 3Q 2007: $553 million
- 4Q 2007: $678 million
- 1Q 2008: $842 million
- 2Q 2008: $698 million
- 3Q 2008: $452 million
- 4Q 2008:$368 million
- 1Q 2009: $263 million
- 2Q 2009: $139 million
- 3Q 2009: $186 million
- 4Q2009: $221 million
- 1Q2010: $239 million
- 2Q2010: $476 million
- 3Q2010: $757 million
- 4Q2010: $2.55 Billion
- 1Q2011: $890 million
- 2Q2011: $917 million
A capital expenditure is an investment in a long-term asset, typically physical assets such as buildings or machinery. Google says the majority of its capital investments are for IT infrastructure, including data enters, servers, and networking equipment. In the past the company’s CapEx spending has closely tracked its data center construction projects, each of which requires between $200 million and $600 million in investment.
Looks like Google is preparing itself for the impact of its social networking site once it becomes fully operational.
While CaPex tends to drain cash, Google would be able to manage its spending with all the revenues it has been getting.
It’s crazy to even begin to think of how much data center real estate Google already has, much less how much they’ll need to expand it once Google + (hopefully) gets big.