Google's Plans for New Mountain View Headquarters Foiled - Analyst Blog

Search giant Google Inc. 's GOOGL dreams to have a 3.2 million-square-foot headquarter with a translucent rooftop in North Bayshore district of Mountain View, CA was partially crushed after The Mountain View City Council approved the extension of its office by just 515,000 square feet. Google in fact had sought for a total of 2.5 million of additional square feet.

In February, Google revealed a blueprint for a gigantic expansion of its "Googleplex" headquarters to include four futuristic, eco-friendly campus sites. The sketches showed several clear tent-shaped buildings covered in an ultra-thin glass mesh. It had apparently commissioned star architects Bjarke Ingels (of BIG) and Thomas Heatherwick to handle the design. LinkedIn had also applied for building rights.

The City Council has been planning the distribution of its 2.2 million square feet of remaining office development rights in North Bayshore, for quite some time now. It has been struggling with rising housing costs as Silicon Valley's flourishing economy is driving up demand and prices.

Google's ambitions got shadowed when, as a result of the Council's 4-3 vote, it received hardly a quarter of the office space it had requested, that is an extension of 515,000 square feet of the total 2.2 million square feet. With the amount of land that it has been awarded, it can build just one of the four buildings that were part of the original construction plan.

Linkedin, on the other hand, received the lion's share that is two-thirds of the 2.2 million square feet space (1.4 million square feet). LinkedIn got just 12% less land than what it had originally requested, whereas Google's plans were dealt a heavy blow as it received 72% less than what it had asked for.

The rejection of its proposal is disappointing for the search giant. Google's application was in line with its big goals. But it has also faced uncertainty in Mountain View, which has seen housing prices escalate and jobs fall as Google grew. At its new campus, Google had offered to add bike paths and retail opportunities, like restaurants, for local businesses.

But with the approval not going entirely in its favor, it remains to be seen whether Google has any other alternative left and how it goes about pursuing its plan.

Google holds a Zacks Rank #3 (Hold). Better-ranked stocks in this industry include Synacor, Inc. SYNC , MeetMe, Inc. MEET and Limelight Networks, Inc. LLNW . All these stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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