Google's Data Center Building Boom Continues: $1.6 Billion Investment in 3 Months

GOOG-CapEx-2Q-2013

Google's extraordinary data center building boom continues to drive its spending, as the company invested a record $1.6 billion in its data centers in the second quarter of 2013. It marked the third consecutive quarter, Google spent more than $1 billion on data centers and servers, reflecting the company's latest wave of data center construction projects.

The capital expenditure (CapEx) numbers were disclosed Thursday in Google's earnings report for the second quarter, which ended on June 30. The Internet services giant fell short of Wall Street's expectations, amid tight scrutiny of its advertising performance.

While results may fluctuate from quarter to quarter, the need to invest in infrastructure continues apace. Google had pumped $1.2 billion into its server farms in the first three months of 2013, topping the $1.02 billion from the fourth quarter of 2012. The only time the company has spent more on capital expenditures was the fourth quarter of 2010, when it spent $2 billion purchase of 111 8th Avenue, primarily for its office space.

Google's data center construction will likely continue at high levels in coming quarters, as since November the company has announced a $200 million expansion in Council Bluffs, Iowa, a $600 million expansion at its campus in Berkeley County, South Carolina and another $600 million to expand its campus  facilities in Lenoir, North Carolina, and $390 million to add capacity to its facility in Belgium. Google is also expanding its infrastructure in South America and Asia.

Here's a look at Google's quarter-by-quarter spending on capital expenditures.

A capital expenditure is an investment in a long-term asset, typically physical assets such as buildings or machinery. Google says the majority of its capital investments are for IT infrastructure, including data enters, servers, and networking equipment. In the past the company's CapEx spending has closely tracked its data center construction projects, each of which requires between $200 million and $600 million in investment.