Google plans $1B expansion in New York

Associated Press

Silicon Valley is becoming Silicon Nation.

Google announced today it will spend more than $1 billion to build a new office complex in New York City that will allow the internet search giant to double the number of people it employs there.

It is the tech industry's latest major expansion beyond the Seattle-San Francisco Bay corridor. It follows recent steps by Amazon and Apple to set up large operations well outside their home turf.

Tech companies are "coming to the realization that the Bay Area, which has traditionally been the major center of tech activity in the U.S., is getting expensive and crowded," said Andrew Bartels, principal analyst at Forrester Research.

"A lot of vendors are coming to the realization that 'We can probably find top talent elsewhere at a more affordable costs, and perhaps a better style of life for employees who may be struggling to make ends meet.'"

The Northeast is attractive because of its large concentration of highly educated young people. New York in particular also offers proximity to Wall Street and already has the second-biggest concentration of tech startups behind the Bay Area and a large base of tech employees, Bartels said. Facebook, based in Menlo Park, Calif., has more than 2,000 employees in New York.

Google, based in Mountain View, Calif., will fashion a complex of more than 1.7 million square feet along the Hudson River in the city's West Village neighborhood, Ruth Porat, senior vice president and chief financial officer, said in a blog post.