On Tuesday I ran across a story about Google's intention to build a new $600 million server farm in one of the Carolinas.  As an incentive, and to keep Google from building in South Carolina, North Carolina was offering the search giant millions of dollars in tax breaks, an almost $5 million grant, and had started clearing land.

A similar plan is being ironed out for Microsoft, but this time the state is Texas and, in particular, the city is San Antonio.

Microsoft announced yesterday that it has decided to build a $550 million data center in the Lone Star State's city best known for the Alamo.  The data center will hold thousands of computers and be a place "where the Internet lives", to use the words of Microsoft Data Center Senior Director Mike Manos.  Manos spoke with Express-News, a local paper, to detail some of the specifics about the deal.

According to the article, Microsoft looked at a lot of places but ultimately went with San Antonio.  And while the complex will only generate about 75 jobs, the site is huge:  44 acres… 470,000 square feet… almost as big as the Alamodome.  The city normally reserves tax and other incentives for companies creating more jobs.  But the Microsoft complex will pump millions of dollars into the city's pocketbook so the red carpet is still being rolled out.  The city council voted to approve a 10-year plan that will offer Microsoft a 100% tax break and $5.2 million in funding from the city's utility company.

The city doesn't see the package as a "gift" to Microsoft.  San Antonio Mayor Phil Hardberger told the Express-News that it was "a gift to ourselves" (in reference to the city of San Antonio).

So first we see Google building a server farm.  And now Microsoft is building an equally expensive data center.  What's Yahoo doing to compete?  Will they announce a similar expansion project now?  Why are they always last??