Google's land grab hints at datacentre expansion

Google's second-quarter outlay on land, technology and buildings suggest the search giant may be planning further datacentres.

In total, Google spent $917m (£569m) on capital expenditures in the second quarter, the company reported in its quarterly earnings on Thursday. The "majority" of the money went on "land and building purchases", the company said.

The news marks the first time Google has specifically broken out land purchases in an earnings release since the third quarter of 2005.

One explanation could be the company has decided to expand its office buildings, but this is unlikely, given its $1.9bn acquisition of the 2.9 million square-foot 111 Eighth Avenue building in New York in December. Another view could be it is buying land for future datacentres.

In May, Google said it was considering increasing its datacentre footprint in Europe. "Right now we've got two datacentres in Europe. I think over time that will become three or four," Google's senior vice president of operations, Urs Holzle, told ZDNet UK.

Overall second-quarter capital expenditure was marginally up on previous quarters. In the first quarter, Google spent $890m on capital expenditure, with the majority going on datacentres, servers and networking equipment. Discounting the New York purchase, it spent $655m in the fourth quarter of 2010 and $757m in the third quarter.