Google Predicts Increased Spending

The Mountain View Company has released a quarterly financial report on August 9, 2006, in which it warns investors of the implementation of an increasing spending. The investments strategy referred to in the advisory points out the negative impact on Google's finances following a rise in the spending related to its data centers and ascendant cash compensations.

"Our cost of revenues will increase in 2006 primarily as a result of anticipated increases in traffic acquisition and data center costs, although traffic acquisition costs may fluctuate as a percentage of advertising revenues," Google explained. The Mountain View Company has reiterated that the spending surge was predicted since earlier this year. The search giant argued that the financial efforts are associated with building a data center platform for the implementation of its evolving range of Web services.

"The annual rate of growth in 2006 of our spending on property and equipment will be substantially greater than the annual rate of growth of our revenues," affirmed Google summing up with a sentence its capital spending. The search giant stated that increased spending will also follow the introductions of increased cash compensations used to reward employees.