Skip to content
Subscriber Only
Businessweek
Economics

The High Cost Of Wooing Google

States and cities are dangling ever-bigger inducements to attract companies, and the digital giant knows how to drive a hard bargain

Lenoir at first seems an unlikely place for a high-tech outpost of the hottest brand on the Web. Nestled beneath the Blue Ridge Mountains of western North Carolina and a two-hour drive from the nearest commercial airport, the quiet town and its neighboring communities have reeled from the closure of seven furniture factories and the loss of more than 2,100 jobs in the past three years. But down-on-its-luck Lenoir has just about everything mighty Google Inc. (GOOG ) wants.

The digital titan, based in Mountain View, Calif., has been hunting for places to plant new server farms: vast, immaculate warehouses filled with row upon row of computers that allow Google to offer faster online searches and advertisements. Lenoir (pronounced like the woman's name Lenore) boasts resources at the top of Google's list: cheap, abundant electricity; excess water capacity to keep the computers cool; and lots of inexpensive land.