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Internet Powers Open Up Their Wallets

The Web's biggest spenders have mostly started splurging again.

I wrote six months ago that Google, Microsoft and Amazon -- among the world's biggest operators of Internet technologies and cloud-computing services -- had slowed or reversed their perky growth in spending on huge server farms and other capital projects. I didn't expect the breather to last -- and for the most part, it hasn't.

Collectively, capital spending by those three giants and Facebook has risen 23 percent so far this year after a collective decline of 0.9 percent in 2015. Only Google's parent company Alphabet has bucked the capex-growth rebound.

The tech superpowers don't disclose exactly where their capital expenditures go, but it is clear that buying and maintaining their gigantic computing networks represent a big chunk of the overall bill. It costs a ton to run seven Web services with at least a billion monthly users, as Google does, or to power other companies' computer networks, as Amazon Web Services does.

Alphabet, Microsoft, Amazon and Facebook spent a combined $23 billion in 2015 on capital projects. During an investment flurry from 2011 to last year, the companies' combined capex nearly tripled.

Capital spending has become essential fuel in the Internet superpowers' war for consumers and for companies...