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BizReport : Advertising archives : January 22, 2007

Google, Microsoft Take Aim on Rapid Growth

Trying to anticipate the growth of online advertising, Google and Microsoft say they are building new data centers. The centers will help them deal with the expected boom in online advertising over the next few years. Together, the two online giants are expected to spend about $1 billion.

by Kristina Knight

According to an article in the Financial Times, Google will spend about $600 million to build a server farm in North Carolina. In the mean time, Microsoft has developed plans to build a similar type of facility in Texas. Many states have been battling to attract these new data centers; North Carolina wooed Google by offering incentives worth $100 million.

According to reports, Google doubled spending in 2006 to more than $800 million; however, the exact numbers won't be available until Google releases their year-ending earnings reports later in January.

Microsoft's center is just another step in its new "Live" range of services. The company hopes the new "Live" offerings will help them gain ground on leading competitors Google and Yahoo. The Texas plant will be the company's second data center; both centers are for their "Live" business.

In the past, Internet companies have chosen to build in the Pacific Northwest because of lower electricity costs there.

Tags: advertising spending, online advertising

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