"Google's investment in the startup scene here is a clear signal," said lawyer Andre Egger, who specializes in financing for technology and entertainment companies.
Egger noted that the city, whose unofficial motto is "poor, but sexy," gained a bad reputation for copying ideas some years ago. Its biggest homegrown startup is Rocket Internet, a company that has found success imitating the concepts of existing websites and now boasts 15,000 employees worldwide.
"Berlin used to copy, now it has its own culture and structures," said Egger. Last year alone the city registered 500 Internet startups and those that attract investors can now expect to receive between €2 million and €3 million in initial funding, he said.
A Berlin startup that has already made a name for itself is 'Wunderlist,' a task-management tool that regularly ranks among the 100 top productivity apps on iTunes.
6Wunderkinder, the app's maker, is also moving into the new hub, which will include open space offices, restaurants, a gym and a concert venue.
"If we want to be like Silicon Valley in a few years we need investors like Google and spaces like this," said the company's chief marketing officer, 28-year-old Benedikt Lehnert.
Google doesn't plan to use the new site to poach ideas or successful startups, said Max Senges of Google's German policy team.
But the investment — a minute fraction of the $2.18 billion Google earned in the third quarter — could pay off for the company in other ways.
The search giant has been at odds with the German government and the country's publishers over the so-called 'Google Tax,' a proposed levy on the use of web content. Google has also found Germany one of the trickiest markets for privacy regulation.
"It's not part of effort to improve our image in Germany," Senges said. "But we hope that the sum and the substance of what we do will convince people that we are not evil."