Google’s spending on property and computer increased three times. In fact, Alphabet investors found too good to celebrate.
Making profit, while staying ahead in the competition is expensive for internet business.
However, to stay ahead of Google’s parent company, Alphabet Inc. spent as much as $7.3 billion during the first quarter of 2018 to buy property and computer. If you look at Alphabet’s financial statement, you’ll see the expenditure increased sharply as much as 300%. From $2.5 billion to $7.3 billion is an eye-popping increase undoubtedly.
Earlier in February 2018, Reuters reported, “Alphabet Inc.’s Google has agreed to pay more than $2 billion for New York City’s Chelsea Market building, the Real Deal reported”.
Alphabet CEO Ruth Porat clarified in a conference, “our facilities spend in Google, dominated by the Chelsea Market Acquisition, reflects that we favour owning rather than leasing real estate when we see good opportunities”.
The CFO further said, “It’s also on data centres and undersea cables. On machines, the biggest contributor is the demand that we’re seeing. So in particular, it’s the expanding application of machine-learning efforts across Alphabet, plus the requirements for cloud and searches and YouTube and then, secondarily, the increased cost of newer technologies, CPUs, memory, network”.
However, Porat assured the investors that “I think more to your question with respect to technical infrastructure, that reflects investments in compute power to support growth that we see across Google, and the largest component is on machines”.