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Google Slows Data Center Growth; Opts Out of North Carolina Grant

posted on December 5, 2008


We have another sign that Google is very much concerned about the current economic conditions. Both the Raleigh News & Observer and the Triangle Business Journal are reporting that the search engine giant has told state officials it won’t be taking a $4.7 million grant after all.

The grant was supposed to be an incentive for Google to create 210 jobs and spend $600 million over four years–all at its new data center in Lenoir, NC. However, Google has thus far only hired 50 employees and has all but stopped the expansion of its data center in Lenoir.

While Google states it didn’t like all of the terms of the grant agreement it also cited “recent volatile economic conditions” in a letter to state officials.

Now, correct me if I am wrong, but isn’t the purpose of these new data centers to support Google’s growth in its core offering–search? If Google’s not willing to continue spending at the same pace on search, does this suggest that Google’s search growth is slowing?

It’s one thing to shut down Lively.com, but a little more concerning to slow down your data center growth.


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  • http://spudmobile.co.uk/guitar-hero-world-tour.aspx George Nobles

    This is very critical situation for online bussiness. Google also facing a problem now a days.

  • http://www.greatpriceshere.com Nicole Price

    I suspect that it could be a wait and watch move for the time being. There are just too many uncertainties out there.

    Nicole Price’s last blog post..Offbeat Gift Ideas

  • http://www.seobrain.com/?p=10 SeoBrain

    Well, Google will wait n see.. because build new data center cost too much for their finance. I think this decision for now doesn’t make google search more slow after and i think this new data center is not only for google search, maybe they have new secret project plan. Who knows ?

  • http://fudge.org Jay Cuthrell

    Andy, It could simply be the case of not needing what they thought they might. Google’s various other datacenter operations have enjoyed rapid evolutions in actual space requirements to facilitate growth…. that the whole “football field” approach might not be matching the internal planning projections if you can get 10x more from 1/2 the space a year later.

    Also, with their recent reduction in contract labor it could signal that there are many things that Google has figured out how to do with less people. Google manpower requirements in their own datacenters was often critiqued by outside analysts that pulled together their understanding of how other Google like infrastructure centers staffed their own datacenters.

    Telecom manpower for facilities is much more mature than a datacenter. There is rarely a body required to operate several central offices and the sizes of central offices have evolved from floors in a building to something the size of a pedestal green box at the corner of your housing development entrance.

    So… I’m not ready to read that much into a slower build.

    -Jay

    Jay Cuthrell’s last blog post..Too Much Text

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  • http://themakemoneyfromhomeblog.com Ken @ Money Blog

    I’ll take it. And I’ll guarantee to bring jobs and spend money. ; ) lol. Interesting question though, is Google growth slowing…

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  • http://www.seoresults.co.za/pages/seo-tools/ Jacques Seoman

    Your argument makes a lot of sense Jay, and I’m inclined to agree with your views. Google is definitely not spending unneccessary money by the looks of things though. The word consolidation is definitely applicable.

  • http://www.paystolivegreen.com Patrick

    Building this plant would only seem to help the economy as it would create new jobs for the region. I’m not sure what their reasoning behind this is, but as you said in the article, it could mean that google’s growth is slowing some.

    Patrick’s last blog post..Make Your Own Homeade Pesticides and Repellants

  • http://super-affiliatetraffic.com Super Affiliate Traffic

    So, it seems the recession hits us all. Well, at least, it changed Big G’s plans or. Curious how this will evolve.

    Super Affiliate Traffic’s last blog post..Super Affiliate Traffic by Erick Rockefeller and Howie Schwartz

  • http://www.netage.co.za Goran Web Design

    I think too many people are looking for signs that Google is gonna drop down a notch or two and in the process of looking for these signs, are imagining a lot of problems that aren’t really there

  • http://www.egrowthmarketing.com eSales Girl

    Maybe they just have a better offer. They are building in Iowa right now and they may have just gotten more per body than NC. With a grant – they may also be in a all or nothing position.

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