Why Google buy a Finnish mill from Stora Enso

March 9, 2009 by timbercommunity

Submitted by timbercommunity on 2009, February 13 - 12:30am According to a press release Stora Enso has signed an agreement to sell the buildings and most of the Summa Mill site in Finland to Google for approximately EUR 40 million. Stora expects the deal to close by the end of the first quarter 2009. "We are currently considering building a data center at this site, and, as with any sort of construction project, there are a number of contingencies to be resolved and plans to be put in place," according to a Google statement.
So why are Google buying a Mill??? Google said that it plans to build a data center, or what is also know as a "server farm," at the site. They have earlier bought data centers in Europe to increase capacity for its services. One of Google's largest data centers outside the U.S. is in St. Ghislain, Belgium and they also bought farmland in Kronstorf, Austria, last year for a new data center. I would put my cents guessing Google wants to cooperate closely with Nokia regarding the concept of cloud computing and act as a long term provider of mobile content. Cloud computing is the next concept in IT according to Radargroup.
Read more (in Swedish) Maybe the two companies want to cooperate the same way Ericsson and Sony do, Cloud computing is the latest trend in IT and then they need large IT-infrastructure. Other companies that have adopted the concept of cloud computing are competitors like Microsoft, Amazon. Both companies are developing content but they have quite different business models. The business model of Nokia is built on mobile devices, smart phones and communication while Google is built on delivering content and advertisment. Informa forecasts that mobile advertising annual expenditure will reach $11.4 billion by 2011.
Other analysts predict the market will be as big as $20 billion by then. (Hmm this prediction was before the Financial crash: but anyway this market is probably quite big...) The competitive advantage of Nokia is to develop more products on the cellular phone market. Nokia have new handsets with GPS that could work pretty well with Google map services and they could both create new location-based services for locating people on a map displayed on the mobile phone. Something which are usefull for dating services, payments and entertainment. Google own YouTube, which is a defacto standard in video and music services, and Nokia could easily use new devices to upload content to YouTube instead of inventing a new wheel with a new content system. It sounds like a perfect match... Obviously they need big energy infrastructure....something they get from the Mill they are buying...