Nebraska’s Wooing Led to Yahooing

Nebraska economic development officials have been working hard to attract major data center projects to their state. And it must have been frustrating to see Google and Yahoo each announce enormous data center projects next door in Iowa.

So when Yahoo came to Nebraska as part of a 17-state site location process, state officials were determined to compete hard for the project, a commitment that extended to the governor’s office. When company and local officials gathered this morning to announce Yahoo’s $100 million data center in La Vista and customer care center in Omaha, Gov. Dave Heineman wore purple Converse Chuck Taylor All-Stars. Purple, of course, is Yahoo’s signature color.

“The personal involvement of the governor was the key here, as evidenced by his purple shoes,” Yahoo Vice President of Operations Kevin Timmons told the Omaha World-Herald. “His involvement was a big factor compared to the competing states. I got a lot of calls from him asking, ‘Kevin, what do we have to do to get to a yes?’”

Yahoo Set to Unveil Nebraska Project

Yahoo has purchased this building in La Vista, Nebraska for $14.8 million.

Yahoo today will confirm its plans to build a major new data center facility in La Vista, Nebraska, a suburb of Omaha. Nebraska Gov. Dave Heineman is scheduled to hold a news conference at 10 a.m. in La Vista and is expected to discuss the state’s effort to win the project, which is expected to include an investment by Yahoo of at least $100 million. A key development was Nebraska’s adoption of tax incentives that made it more attractive for Yahoo to build in Nebraska than Iowa, which has already won huge data center projects for Google and Microsoft.

Yahoo recently paid $14.8 million to purchase a 300,000 square foot existing structure on 24.3 acres of land in La Vista. The building previously served as the headquarters for Tender Heart Treasures, which makes gifts and home decor products, and will vacate the building in January.

The new facility is a major step in Yahoo’s ongoing expansion of its data center infrastructure to support its online properties. The timing of the announcement is somewhat awkward, following this week’s announcement that Yahoo will lay off 1,400 workers as part of a plan to cut costs by $400 million. But Yahoo has been less aggressive in its data center capital spending than rivals Microsoft and Google, which have each announced more than $2 billion in new projects since the start of 2007. 

Q&A: Yahoo Discusses Its Data Centers

Search and news portal Yahoo (YHOO) is a major user of data center space, and is in the midst of a significant expansion of its infrastructure. We recently had an email Q-and-A with Yahoo Vice President of Operations Kevin Timmons, who oversees the company’s data centers, and asked about Yahoo’s data center growth and energy efficiency initiatives.

What are the factors prompting Yahoo to seek additional data center space?

We’re constantly in expansion mode here, primarily due to simple traffic growth to the site and our efforts to continuously serve our global audience in the best manner possible. We also are continuously looking to consolidate many of our smaller legacy centers into more efficiently designed facilities that are more reliable and more cost effective to operate.

How many data centers does the company have?

We’ve got data centers of varying sizes located around the world. We don’t share the exact number.

Is Yahoo incorporating energy efficiency technologies into its new data centers?

With any new Yahoo! data center project energy efficiency efforts start early on in the process. For example, we spend a tremendous amount of due diligence on site selection in order to locate in a climate that will allow for maximum economization. We strive to operate our centers for a significant portion of any year using ambient air for cooling. In order to do that, we certainly challenge the traditionally accepted temperature and humidity standards and have achieved pretty remarkable results in overall efficiency as a result. We have some patents pending on our cooling technology that virtually eliminates any need for air handling within the data center, again all in the name of energy and cost efficiency.

Yahoo Buys Site for Nebraska Data Center

Yahoo has purchased this building in La Vista, Nebraska for $14.8 million.

Yahoo continues to move forward with plans for a major data center project in Nebraska, even as the company appears to be preparing for cost-cutting that could include employee layoffs. Yahoo paid $14.8 million to purchase a warehouse and headquarters building for Tender Heart Treasures in La Vista, Nebraska, according to property records.  

The property includes a 300,000 square foot existing structure on 24.3 acres of land, with approval to add a 38,000 square foot expansion. The building includes a three-story office area and a warehouse with a 35-foot ceiling. Tender Heart Treasures, which makes gifts and home decor products, will vacate the building in January when it moves to another location, according to the Omaha World-Herald.

Yahoo Nebraska Data Center Set for La Vista

Yahoo has selected La Vista, a suburb of Omaha, as the location for its Nebraska data center project, according to papers filed with the state. Nebraska Tax Commissioner Doug Ewald told Omaha.com that Yahoo has applied for tax incentives under the Nebraska Super Advantage program, which requires a minimum investment of $100 million and the creation of at least 50 high-salary jobs paying a minimum average salary of $68,700.

La Vista is one of the fastest-growing cities in Nebraska, and has 800 acres of industrial business parks. Current corporate residents from the tech sector include HP and eBay’s Paypal unit, which employs about 2,000 workers at a call center in La Vista.  

Yahoo Mulls Wenatchee Expansion

In its bid to convince Washington state legislators to reinstate a tax break for data center operators, Yahoo is using a carrot as well as a stick. A Yahoo executive said Thursday that the company would consider building a second major data center complex in Wenatchee, Wash. if the state restores the sales tax incentive.

Kevin Timmons, vice president of operations for Yahoo, told the Wenatchee World that the company has scouted land in Wenatchee for a data center “similar in size” to the company’s 140,000 square foot data center in Quincy. If the tax break materializes, Timmons said, Yahoo will continue with its plans to add a second phase of the Quincy data center as well as construct a new data center in Wenatchee. However, those plans are conditional. “Without a tax exemption it makes no sense,” Timmons said.

Legislation in Washington state that would have restored a tax break for data centers won’t be passed in 2008. The tax package was drafted after the state ruled that data centers were no longer covered by a state sales tax break for manufacturing enterprises, and thus must pay a 7.9 percent tax on data center construction and equipment.

HP, Intel, Yahoo Team on Cloud Testbed

HP, Intel Corp. and Yahoo have created a global, multi-data center test bed for cloud computing research and development, the companies said today. The initiative is designed to provide researchers with access to an open source cloud platform for honing their development skills. The new platform will compete with a similar cloud testbed introduced by Google and IBM.

Both efforts are designed to provide researchers and universities with easy access to a cloud platform on which they can develop the skills required to write and support the cloud applications of the future.

The three tech giants are partnering with three universities - the Infocomm Development Authority of Singapore (IDA), the University of Illinois at Urbana-Champaign, and the Karlsruhe Institute of Technology (KIT) in Germany - along with the National Science Foundation.

The testbed will initially consist of six “centers of excellence,” each hosting a cloud computing infrastructure running on HP hardware and between 1,000 to 4,000 Intel processor cores. The six centers - housed at IDA facilities, the University of Illinois at Urbana-Champaign, the Steinbuch Centre for Computing of the Karlsruhe Institute of Technology, HP Labs, Intel Research and Yahoo - will be fully operational later this year.

Yahoo Eyes Omaha for Major Data Center

Yahoo is considering Omaha, Nebraska as the site of a major data center project, the latest in a series of moves by Yahoo to expand its infrastructure to compete with Microsoft and Google. Yahoo’s interest in Omaha was first noted yesterday by TechHermit, and has been confirmed by our sources, who say the Internet portal has looked at development opportunities in several Midwestern states. Nebraska, which has stepped up its efforts to attract data center projects in recent months, has emerged as the front runner.

While Nebraska appears poised to win the deal, several details have yet to be finalized, sources say. No information is available yet on the exact site or scope of the new facility. Yahoo’s most recent company-built data center in Quincy, Washington was 140,000 square feet.

Yahoo has been accelerating its data center build-out in recent weeks, leasing data center space in Santa Clara from Digital Realty Trust (DLR) and speeding deployment of its footprint in a facility in Ashburn, Va. operated by Dupont Fabros (DFT). Yahoo continues to be the focus of takeover interest from Microsoft and investor Carl Icahn, but has rejected overtures from both parties. If Yahoo is to go it alone, it will need to continue to scale its Internet infrastructure to remain competitive with Google and Microsoft, which are both investing heavily in data centers.

Omaha was recently named one of the most affordable U.S. cities to operate a data center by The Boyd Company, with an annual operating expense of $12.9 million, less than half the cost of operating a similar facility in New York. Nebraska has also been developing incentive programs to compete with its neighbor Iowa, which has won more than $1 billion in data center investment from Google and Microsoft. Google is building a $600 million data center in Council Bluffs, while Microsoft is in the late stages of site selection for a project near Des Moines.

Microsoft, Icahn Align Interests on Yahoo

We haven’t been posting every twist and turn in the seemingly eternal on-again, off-again Microsoft-Yahoo takeover saga. But this morning’s developments are significant. Microsoft now says that efforts by dissident Yahoo shareholder Carl Icahn to replace the Yahoo board could accelerate a Microhoo merger. In throwing its weight behind Icahn’s proxy battle for control of the Yahoo board, Microsoft is taking its case to Yahoo’s shareholders, who may soon have the chance to cast the deciding vote in whether the company will continue on its own or be bought by Microsoft.

Check out the full statements from Microsoft and Icahn for more details. Meanwhile, the UK’s Times Online reports that Yahoo spent the July 4 holiday weekend in discussions with Goldman Sachs and Time Warner about defensive partnerships.

Yahoo’s Future and Data Center Demand

In the last week there’s been lots of analysis about the future of Yahoo (YHOO) now that the company has spurned Microsoft (MSFT) and begun using ads from Google (GOOG) to monetize some of its inventory. Most of the punditry has focused on the battle between those three companies, handicapping winners and losers. Some of it has been interesting reading.

But here at Data Center Knowledge we are all about the data centers. For us, the bottom line is that the collapse of negotiations between Yahoo and Microsoft will result in a net gain in demand for data centers. Here are the factors supporting our belief:

• No Data Center Consolidation: It’s difficult to say whether the inevitable consolidation of Microsoft and Yahoo’s data centers would have led to the shuttering of any facilities. But the companies have many of their data centers in the same places, including Silicon Valley, northern Virginia and Quincy, Washington. Then there are the platform issues: Microsoft has standardized on its own operating systems and servers, while Yahoo has optimized its operations on open source software, especially FreeBSD, PHP and Hadoop. Microsoft CEO Steve Ballmer said all the right things about a merged Microhoo “being a PHP shop for the foreseeable future.” But it’s reasonable to expect that Microsoft’s platform would eventually have become the standard.