Why Is Google Succeeding Where Amazon Failed? Tech Giant Expanding Throughout New York

Google is showing success in New York City, where Amazon (AMZN) seems to have failed with its expansion plans. The tech company, which opened its doors in the New York neighborhood of Chelsea in 2006, has more than 8,000 employees in the area and reportedly has plans to balloon that number to 14,000 by 2028.

Last year, Amazon looked to set up a second headquarters in Long Island City, New York, but later pulled out of the deal because of backlash and unsavvy government subsidy negotiations. Google, however, has slowly eaten up real estate in the area without much concern.

According to Bloomberg, The Alphabet Inc. (GOOG) company has several buildings in New York, buying several of the locations over the last two years. Google reportedly leaves the exteriors of these older buildings alone, which has allowed the tech giant to subtly grow its business without requesting government subsidies.

The deal for Amazon to move into Long Island City was criticized for what could create gentrification in the community, where Chelsea has already seen gentrification as professionals look for homes close to Manhattan without the high price tag that borough commands, the news outlet said.

Amazon dealt with controversy in Long Island City as city officials saw its development plans as a contributor to congestion and high rents despite bringing in an estimated $186 billion, according to Bloomberg. Google reportedly has been attributed to growing Chelsea and the Meatpacking District of New York City that has blossomed into a tourist area for many.

“Google has been the hub for this renaissance,” Mitchell Moss, an urban planning professor at New York University, told the news outlet. “Once it becomes acceptable for educated workers, then it becomes acceptable for everyone else.”

Google’s existence in Chelsea has not been without backlash as the tech firm has been criticized for failing to hire more local workers, but reportedly brought public internet to Chelsea park and has tried to stay active in the community.

New York has been seen as the next tech capital behind California with more than 264,000 tech workers in 2018, according to CBRE Group Inc. Facebook also has a presence in the state with a lease at Hudson Yards. Amazon said back in February that it still has plans to expand in New York with 18 tech hubs planned for placement in the U.S.

Shares of The Alphabet Inc. stock were up 0.91% as of 10:45 a.m. while shares of Amazon stock were down 0.05% at the same time.