Google Expands SC Data Center - Analyst Blog

By Zacks | January 22, 2013 AAA

Google Inc. (GOOG) recently announced the expansion of its data center in South Carolina to meet the fast-growing demand for Internet usage and data storage capacity. The expansion will involve an additional investment of $600 million, bringing the total investment at Berkeley County to over $1.2 billion. Google has been present in South Carolina since 2006 and has invested $600 million for its purchase.

The need for data center expansion is rising due to the growing demand for cloud computing and the ever-increasing needs of Internet users. The data centers include large banks with computer servers that process everything from Internet searches to email, inquiries to Google maps, YouTube videos and other services.

Google, being no exception, has also expanded its data center to meet the requirement of more data-intensive services, such as Google search, Gmail, Google+ and YouTube. Google has 6 data centers in the U.S., 3 in Europe, 3 under construction in Asia and plans to build another one in Chile.

The U.S. independent research firm, Gartner predicts that datacenter hardware spending will most likely cross $126.2 billion in 2015. These technology warehouses are witnessing strength, as video streaming, smartphones and apps are boosting demand for the hard drives needed to run them.

Google delivered a strong third quarter with gross revenue touching a record $14.10 billion. Revenues from both Google-owned and partner sites continued to grow double digits on a year-over-year basis.

Currently, Google retains a Zacks Rank #2 (Buy). We are also positive about Yahoo Inc. (YHOO), which carries a Zacks Rank #2 (Buy) and cautious about companies like Microsoft (MSFT) and International Business Machines (IBM), both of which carry a Zacks Rank #4 (Sell).

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