Google says its economic impact on Minnesota businesses grew 12% last year

Google's economic effect on businesses and other institutions in Minnesota grew 11.8% last year, the company said Thursday in an annual report of its vast influence on how information is shared and advertised.

The company said that its products, ranging from marketing tools to cloud-based data storage, were used by nearly 30,000 businesses that provided $8.2 billion worth of economic activity in the state. That's up from an economic impact of $7.3 billion by its Minnesota customers in 2019.

Google said it directed internet users to 289,000 Minnesota businesses via its search engine at least once in 2020.

The company for about a decade has produced a state-by-state synopsis of its reach and economic effects. The data have a promotional effect for Google, which like other Silicon Valley giants has come under increasing scrutiny from the public and lawmakers throughout the country for tactics that in some cases harm businesses and political discourse.

But the data also show the growing breadth and use of digital tools and services in a state.

The company noted that its web search, YouTube and other ad-based services — which collectively makes it the biggest advertising-supported business in the world — provided nearly $12 million in free advertising to Minnesota-based businesses last year, up from $7.3 million in 2019.

Google only recently opened an office in Minnesota, in Rochester, as part of a new partnership with Mayo Clinic. The company directly employs just a few people in the state.

On Thursday in St. Paul, an Xcel executive told the Minnesota Public Utilities Commission that the project was moving slower than expected. Because data centers use a lot of power, the project has the potential to make Google one of Xcel's largest customers.

"We are continuing to work regularly with Google, but obviously it's not coming forward quite as fast as we all hoped," said Matt Harris, Xcel's lead assistant general counsel. "Frankly, I think that is just been part of the last year — it has been chilling for a lot of projects."

Katie Sieben, PUC chairwoman, said, "I take it's still the company's expectation the project will move forward?" Harris replied, "At this time, that's right." Google said it had no update on the matter.

In the online version of its report, Google highlighted its work with Civic Eagle, a Twin Cities startup that provides a software platform to track legislation in all 50 state legislatures, Congress and Puerto Rico.

The company — started by Damola Ogundipe, Yemi Adewunmi and Shawntera Hardy — now has about a dozen employees and 70 customers. Its platform is nonpartisan and provides a way for customers, which include law firms, chambers of commerce and advocacy groups, to work together. "We prioritize working with organizations that are values-aligned with us, organizations that believe in government transparency, organizations that believe in public participation and voter participation for all," said Ogundipe, the company's chief executive.

"They made the decision to partner with organizations that support founders and their unique needs, in my case having a group of Black founders," Ogundipe said. "And they made the decision to walk with us every step of the way, so that as we grew they were able to provide resources to help us get to the next level."

Last year, Google invested $100,000 in Civic Eagle. While that's only a small portion of the capital the firm has raised, Ogundipe said it was still important. The company uses Google for cloud storage and other services.

Staff writer Mike Hughlett contributed to this report.