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Google: The New Port Authority

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  • Google: The New Port Authority

    A juggernaut gets ready to inject a big glob of silicon into New York City.

    111 Eighth Avenue, designed by Lusby Simpson and completed in 1932 to house the Port Authority of New York,
    is one of the largest buildings in the city, an architectural marvel, and a landmark. Looming like a 15-story locomotive over Chelsea, the mammoth red-brick structure occupies an entire city block between Eighth and Ninth avenues and 15th and 16th streets?a footprint larger than two football fields.

    And a footprint big enough for Google's giant steps.

    But Google exec Alan Eustace was being coy when he addressed Citigroup's annual Global Technology Conference late last week at the Hilton Times Square. The Internet search juggernaut's senior vice president of engineering and research was describing a new and urgent reality facing Google. "Can you build global products with a workforce that is only in Mountain View, California?" Eustace asked, posing a rhetorical question to the several dozen assorted Wall Street types in attendance, some of whom were dozing off as he spoke. "The answer is, no you can't. The technical talent that we need to solve the next generation of problems in search does not all live in Mountain View, California."

    Eustace left out the part about the 300,000 square feet of space that Google plans to occupy in the heart of the city. It's a poorly kept secret that the company will soon open a huge new office and networking facility at 111 Eighth Avenue. Google's new base in the city will dump a sizable influx of Google employees into the social and professional environment of Chelsea and the West Village.

    The art deco landmark is fast becoming one of the most important high-tech facilities in the world. Google's blockbuster invasion of New York and its impending takeover of nearly two floors of the massive building aim to make New York City a key component of its little-publicized global expansion?the details of which have become fodder for a mildly hysterical parlor game in the technology community and on Wall Street. The ultimate goal? Perhaps the planet's biggest ever computer network, bypassing all those pesky cable and telephone companies.

    That's why what lies beneath 111 Eighth Avenue may be more important than the building itself. The old Port Authority headquarters sits atop one of the main fiber optic arteries in New York City?the Hudson Street?Ninth Avenue "fiber highway." The venerable behemoth is already one of the country's most important "carrier hotels"?loosely speaking, the physical connection points of the world's telecommunications networks and the World Wide Web. As a result, Google will "have access to as much bandwidth as possible and as much variety of bandwidth as possible," says Dana Spiegel, a technology consultant and executive director of NYC Wireless.

    And now Google will be putting massive amounts of brainpower in the same building as the physical connections. But how does the new data center at 111 Eighth Avenue fit into Google's broader plans?and just exactly what are Google's broader plans, anyway?

    "We have nothing to announce at this time," a typically mum Google spokesperson says when asked about the new offices. "But," she added, "Google is always looking for opportunities to expand." The spokesperson noted that Google already has over 500 employees at its current location at 1440 Broadway in Times Square?an office believed to occupy approximately 100,000 square feet over four floors.

    Because the company refuses to share its plans with either the general public or Wall Street, speculation has bounced around the technology world without official refutation. Some tech watchers have suggested that Google is building a nationwide wireless distribution network to bypass Verizon, AT&T, and the rest of the telecom and cable incumbents. Others have speculated that Google is building its own "parallel Internet" so that it can exert maximum control over online information flow and distribution. Still others have suggested that Google is building something akin to Skynet, the malicious computer network that in The Terminator became "self-aware" and launched a war to destroy humanity.

    Bill St. Arnaud, senior director for advanced networks at CANARIE (Canada's Advanced Internet Development Organization), chuckles at these suggestions. "I think what they are doing is a lot more modest," he says, adding, "Google loves the speculation because it rattles their competitors. All they have to do is sit back and say nothing."

    Still, Google is up to something.

    In 2005, the company spent some $838 million on facilities and hardware. Along with massive purchases of unused "dark fiber"?the underground fiber optic cable left dormant since the dotcom crash?the company has invested in a series of giant data and networking centers. These data centers are home to an estimated 450,000 individual servers, grouped in clusters, or "server farms." With its vast open floors and technological amenities, 111 Eighth Avenue appears to be an ideal location for a massive Google data center.

    "It turns out that one of the biggest global peering facilities is in New York City at 111 Eighth Avenue," St. Arnaud says, referring to the physical spots where tech firms hook up with one another. By positioning server farms in key locations like 111 Eighth Avenue, industry experts believe, Google is quietly, but systematically, building the most advanced computer network in history. "This is why Google is locating big server farms around the world," St. Arnaud says.

    Google not only gains a giant space for a new server farm that will most likely house thousands of Google machines, but also gets direct access to the building's network-neutral meet-me room?literally, an area where telecommunications companies can physically hook up and exchange data cheaply and efficiently. Google would be able to expand its offerings of new Internet products and services such as Internet telephone service, video, and Web-based enterprise software?competing for business against the likes of Microsoft, Skype, and YouTube?much more efficiently and competitively.

    Last week, Google announced that it would offer a suite of Web-based software services aimed at business customers. It is worth noting that Citigroup, the world's largest bank, has a network presence inside 111 Eighth Avenue. In theory, Google will be able to provide Web services to Citigroup directly through the meet-me room, bypassing not only the "Tier 2" service providers who buy and sell Internet access, but the top-level Tier 1 providers, such as AT&T, Verizon, and Qwest.

    For the time being, by installing itself above Chelsea's broadband "fiber highway" at 111 Eighth Avenue, St. Arnaud explained, Google can bypass many of the major telecommunications firms and interface directly with Tier 2 service providers such as Level 3 Communications or XO Communications, which also are located in the building. This will significantly cut down the costs associated with reaching business customers on Wall Street and in the media and fashion worlds, and generally throughout the Northeast power corridor from D.C. to Boston. The arrangement also suits the Tier 2 providers, which are "thrilled because they can get content directly from Google and bypass" the major telecom and cable Tier 1 providers, St. Arnaud says.

    But the advantages of Google's new space at 111 Eighth Avenue are not merely technological. Google's office will be highly efficient, because the lease covers nearly 300,000 square feet on just two floors, rather than the 10 or more floors that much space would take up in a traditional New York City office building, like, say, the Empire State Building, which was completed one year before 111 Eighth Avenue, in 1931. That means fewer bathrooms, fewer elevators, more efficient wiring, and less energy consumption, not to mention those large communal meeting spaces that Googlers love so much. In a way, the vast horizontal spaces afforded by 111 Eighth Avenue echo the sprawling, horizontal nature of Silicon Valley itself, perhaps best exemplified by Google's vast campus in California.

    Depending on how the company allocates its employees and hardware, the new office will represent a significant infusion of Google jobs into New York city?over time as many as 500 to 1,000 new hires, by one estimate. UBS Internet analyst Ben Schachter says that the company's expansion into 111 Eighth Avenue makes sense because the company is hiring at such a torrid rate to keep up with its rapid growth.

    "Clearly, Google is rapidly expanding its head count around the globe," says Schachter, who published a report in May noting that Google had over 1,800 publicly posted job openings worldwide, including over 100 in New York City. "We think this is a company that is building a strong base of talent for the long term." It remains to be seen just what impact the influx of Google employees into Chelsea will have?after all, there are already plenty of technology workers in the building. Still, it will be interesting to see how Google's quirky, geeky-yet-laid-back culture will mesh with the trendy restaurants and exclusive clubs of Chelsea and the meatpacking district.

    And if anyone can afford New York real estate, it's Google.

    Based on conservative real estate industry estimates of the building's asking price?about $33 per square foot?Google will likely pay at least $10 million per year in rent, not to mention the additional capital and labor investment in the economy of downtown New York City. That's just a drop in the bucket for the Internet search leader. Over the last year, the company earned $3.6 billion profit on $8.5 billion in revenue, driven by the meteoric rise of its ubiquitous search engine. What's more, Google just raised over $4 billion cash in a secondary stock sale, bringing its total free-cash hoard to $10 billion.

  • #2
    Re: Google: The New Port Authority

    Wow, that's really interesting, thanks for the info.

    So gentlemen, place your bets. I say this will make quite a difference on those lower blocks as far as cleaning it up and making it safer. I think alot of common complaints about the surrounding blocks will subside with the influx of the "Google Culture".


    • #3
      Re: Google: The New Port Authority

      i agree.

      i want a job with them as just walk to work!


      • #4
        Re: Google: The New Port Authority

        Me too!


        • #5
          Re: Google: The New Port Authority

          Me three.


          • #6
            Re: Google: The New Port Authority

            The ambitious founders of Google, the popular search engine company, have set up a philanthropy, giving it seed money of about $1 billion and a mandate to tackle poverty, disease and global warming.

            But unlike most charities, this one will be for-profit, allowing it to fund start-up companies, form partnerships with venture capitalists and even lobby Congress. It will also pay taxes.

            One of its maiden projects reflects the philanthropy’s nontraditional approach. According to people briefed on the program, the organization, called, plans to develop an ultra-fuel-efficient plug-in hybrid car engine that runs on ethanol, electricity and gasoline.

            The philanthropy is consulting with hybrid-engine scientists and automakers, and has arranged for the purchase of a small fleet of cars with plans to convert the engines so that their gas mileage exceeds 100 miles per gallon. The goal of the project is to reduce dependence on oil while alleviating the effects of global warming.

   is drawing skeptics for both its structure and its ambitions. It is a slingshot compared with the artillery of charities established by older captains of industry. Its financing pales next to the tens of billions that the Bill and Melinda Gates Foundation will have at its disposal, especially with the coming infusion of some $3 billion a year from Warren E. Buffett, the founder of Berkshire Hathaway.

            But Google’s philanthropic work is coming early in the company’s lifetime. Microsoft was 25 years old before Bill Gates set up his foundation, which is a tax-exempt organization and separate from Microsoft.

            By choosing for-profit status, Google will have to pay taxes if company shares are sold at a profit — or if corporate earnings are used — to finance Any resulting venture that shows a profit will also have to pay taxes. Shareholders may not like the fact that the tax forms will not be made public, but kept private as part of the tax filings of the parent, Google Inc.

            Google’s founders, Larry Page and Sergey Brin, believe for-profit status will greatly increase their philanthropy’s range and flexibility. It could, for example, form a company to sell the converted cars, finance that company in partnership with venture capitalists, and even hire a lobbyist to pressure Congress to pass legislation granting a tax credit to consumers who buy the cars.

            The executive director whom Mr. Page and Mr. Brin have hired, Dr. Larry Brilliant, is every bit as iconoclastic as Google’s philanthropic arm. Dr. Brilliant, a 61-year-old physician and public health expert, has studied under a Hindu guru in a monastery at the foothills of the Himalayas and worked as a Silicon Valley entrepreneur.

            In one project, which Dr. Brilliant brought with him to the job, will try to develop a system to detect disease outbreaks early.


            Dr. Brilliant likens the traditional structure of corporate foundations to a musician confined to playing only the high register on a piano. “ can play on the entire keyboard,” Dr. Brilliant said in an interview. “It can start companies, build industries, pay consultants, lobby, give money to individuals and make a profit.”


            • #7
              Re: Google: The New Port Authority

              Me four.


              • #8
                Re: Google: The New Port Authority

                So hey gang....maybe we should get a jump on the competition and get our resumes out now...


                • #9
                  Re: Google: The New Port Authority

                  Good idea. I'm on it.



                  • #10
                    Re: Google: The New Port Authority

                    Google settled in at 111 Eighth Avenue this morning. It's a giant space--more than 300,000 square feet, in fact.

                    According to Crain's, the new location will have the company's largest advertising sales office and its second biggest engineering center (only behind its main headquarters).

                    Google execs wouldn't say today whether their entry to their sleek Manhattan office would mean additional WiFi to the city beyond Bryant Park, where they already provide free service.

                    "You'll have to wait and see," New York Engineering Director Craig Nevill-Manning told Crain's.

                    Google already gives free WiFi to the town of Mountain View, Calif., (its hometown south of San Francisco) and is making plans to expand it to San Francisco, according to Crain's.

                    Don't get your hopes up.