Google puts up $1 billion to ease housing headaches it helped cause

In this May 1, 2019, file photo, a woman walks past a Google sign in San Francisco. Google is making a $1 billion commitment to address the soaring price of housing in the San Francisco Bay Area, a problem that the internet company and its Silicon Valley peers helped create as the technology industry hired tens of thousands of high-paid workers. (AP)
Updated 19 June 2019

Google puts up $1 billion to ease housing headaches it helped cause

  • A report by Working Partnerships called upon Google to build more than 17,000 homes in the area to help offset the anticipated price increases caused by the new campus

SAN FRANCISCO: Google is pouring $1 billion into easing the high-priced housing headaches that it and its Silicon Valley peers helped give the San Francisco Bay Area.
The pledge announced Tuesday by Google CEO Sundar Pichai consists of a $250 million investment fund and $750 million of company-owned land. It will be used to build at least 15,000 homes that will include low- and mid-income housing.
Google’s commitment eclipsed a recent $500 million pledge made by Microsoft to combat housing shortages in the Seattle area and a $500 million housing fund created by a consortium including Facebook.
Google is extending a helping hand as it draws up plans to expand into sprawling offices beyond its headquarters in Mountain View, California. That suburban city of roughly 80,000 people has been swamped with affluent tech workers since Google moved there shortly after its 1998 inception.
Since then, Google’s payroll has swelled from a few dozen workers to the more than 103,000 people now working for it and its corporate parent, Alphabet Inc. Nearly half of those workers are based in the Bay Area.
While Google has been expanding, so have a wide variety of other technology companies, including Apple, Facebook, Oracle, Salesforce and Netflix — all of whom also lavish their workers with six-figure salaries and stock options that can yield multimillion-dollar windfalls.
The high incomes have resulted in bidding wars for the limited supply of homes in the Bay Area that can only be afforded by the affluent, a group increasingly dominated by tech workers, while people employed in other lines of work struggle to make ends meet on more modest incomes.
That is making it impossible for people on the lower end of the economic spectrum to buy a home in the Bay Area, where a mid-priced house sold for $990,000 in April, according to the California Association of Realtors, a trade group. In 1999, a mid-priced home sold for $308,000.
It’s even worse in San Francisco, a city from which many tech workers ride company buses to the Silicon Valley suburbs. A mid-priced house in San Francisco sold for nearly $1.7 million in April, according to the realtors’ group, quadruple the price of 20 years ago.
Google’s next big project will be in the Bay Area’s most populous city, San Jose, where it plans to build a corporate campus consisting of offices and housing where 15,000 to 20,000 of its employees will work and live.
The project faced resistance from community activists worried about its effect on housing prices. Last week, a report by Working Partnerships called upon Google to build more than 17,000 homes in the area to help offset the anticipated price increases caused by the new campus. The report by the labor-union backed labor group envisions apartment rent increases of $235 million by 2030 if action isn’t taken.
“For several months, we have encouraged Google to make a bold commitment to address our region’s affordable housing challenge,” San Jose Mayor Sam Liccardo said in a statement applauding the company’s $1 billion pledge.


Google Cloud prepares for Black Friday ‘peak on top of peak’

Updated 04 August 2020

Google Cloud prepares for Black Friday ‘peak on top of peak’

  • Cloud technology, used to host websites and store data, is a key part of many retailers’ e-commerce operations

OAKLAND, California: Alphabet’s Google Cloud unit is poised for a surge in fourth-quarter sales from US retailers, as they brace for record online shopping during the holidays because of COVID-19 lockdowns.
Cloud technology, used to host websites and store data, is a key part of many retailers’ e-commerce operations. As fees are often pegged to site traffic, a jump in activity will drive up revenue for the unit.
Carrie Tharp, vice president of retail and consumer at Google Cloud, said that her team had this year tossed out its linear growth model to predict how many servers it will need to process web orders for retailers around Black Friday.
“We’re planning for peak on top of peak,” she said on Monday. That could be a boon for Google Cloud, which has generated about 30 percent of its revenue during the fourth quarter the last two years.
Stores such as Kohls Corp. and Wayfair Inc. lean on Google months in advance to ensure it has enough servers to withstand increased shopping during holiday discount days such as Black Friday and Cyber Monday in November and December.
This year, Black Friday-style demand has flooded shops since March, when the United States began lockdowns, Tharp said.
Holiday shopping is expected to boost demand further, as retailers including Target Corp. and Walmart Inc. have said they will reduce in-store hours because of coronavirus concerns.
Tharp said the pandemic has already benefitted Google Cloud, with some retailers adopting its predictive algorithms years ahead of plan to help them work out the most efficient way of fulfilling orders.
Electronics retailer Best Buy Co., for instance, announced on Tuesday a multi-year deal to centralize customer and product data with Google Cloud to improve its loyalty program and online ad campaigns.
The companies declined to elaborate on the deal, but Tharp said she hopes it leads to Google eventually powering Best Buy’s web ordering system.