The move is necessary so that the company can expand and attract employees, said Bob Young, the company's founder and CEO.

"We have no character here," he said, glancing around Lulu's no-nonsense office in Morrisville. "If we need to recruit someone from Boston, they have to ask: Do I really want to drive every day to a faceless suburban office where I have to get in a car just to get a hot dog?"

Young, 53, formed Lulu in 2002 as an online venue for authors to publish and market their work, with the business making money by taking a cut of consumer transactions. The company has blossomed into a multimedia venue for consumers and purveyors of video, music, art and other published works. It claims 1.2 million registered users and a growth rate of nearly 15,000 users each week. If that growth rate continues, revenue is projected to double next year to about $50 million, with a public stock offering possibly in the offing.

One wrinkle in that growth might be a rival Web venture with a similar name that is backed by media giants NBC and Rupert Murdoch's News Corp. Last month, Lulu filed a complaint in U.S. District Court in Raleigh, accusing the venture of trademark infringement, deceptive trade practices and cyber piracy. A judge is expected to rule Oct. 16 on Lulu's request that Hulu not be allowed to register its name, or any name "confusingly similar" to Lulu.

Young said regardless of the outcome of that lawsuit, a new headquarters location is needed.

Moving near NCSU was an obvious choice. As a co-founder of Red Hat, the open-source software company on NCSU's Centennial Campus, Young knows firsthand the value of having access to a steady flow of engineering and computer-science graduates.

Young said he expects that like Red Hat, Lulu will benefit from its proximity to the school.

Lulu has 110 employees at offices in Morrisville, London and Canada and a scattering of smaller sites. If revenue keeps rising as expected, the company will add dozens of workers in Raleigh.

With that growth in mind, Young decided to turn the former N.C. Equipment Co. building, a 40,000-square-foot fixer-upper, into a corporate headquarters.

The building, which Young bought this year for $3.5 million, is the one with the big, yellow bulldozer sign on top. The building will require extensive renovations but should be ready in about a year.

Young said he expects Lulu to eventually occupy the entire space, enough room for 200 people based on standard office metrics. Young declined to give a hiring projection.

The move places Lulu's rapid expansion about two miles from downtown in a run-down area.

"It's a great development for Hillsborough Street," said Reid Jones of Mikels & Jones, a commercial real estate brokerage that represents several landlords on Hillsborough Street.

"That area needs help, badly. This move is a real shot in the arm and a positive sign."

Young, who lives in Raleigh, said more technology companies may begin considering moves to the centers of Raleigh and Durham.

"It used to be an understood rule that you locate your technology company near the airport or the Park," Young said. But increasing congestion on Interstate 40 has made those commutes aggravating, he said. And in the meantime, "downtown is becoming a very interesting place."