Yahoo to build $100M data center and add new jobs, despite financial woes
Yahoo on Friday forged ahead with a deal to build both a customer care center and a data center in Nebraska, even after reporting a 64 percent drop in third-quarter profits on Monday of the same week.
Regardless of 10 percent layoff plans and a huge fall in profits announced earlier that same week, eternally optimistic Yahoo said on Friday that it will open a new data center in Nebraska in 2009 at a price tag of $100 million, which may not include new salaries.
Slated to open some time in 2009, the customer care center will be located in a business park in western Omaha, and the data center in a free-standing building in La Vista, Nebraska.
Yahoo is making an initial investment of $100 million in the La Vista data center, and initial hires are expected to include about 50 people, each paid in the $50,000 to $60,000 range.
Yahoo first sent out requests for proposal (RFPs) for the job way back in January. Other states had also competed for Yahoo's two new facilities.
But Kevin Timmons, Yahoo's vice president of operations, pointed to the personal involvement of the Nebraska governor as helping that state to win the contract, according to a report Friday in the Omaha World Herald.
As previously reported in BetaNews, Yahoo CEO Jerry Yang sent out a letter to shareholders in February outlining a three-year business strategy for Yahoo intended to ward off a takeover by Microsoft.
Yahoo has clung to that plan for "financial independence," despite the impact to its business by the overall economy.
"We've been executing against our strategic plan despite a weakened economy and external events brought on by the Microsoft proposals. This speaks volumes to the strength and resilience of the Yahoo franchise and its dedicated employees," Yang contended, in a conference call with financial analysts in July.
By mid-October, Yahoo's share price slid to only about $12 per share, or about 39% as much as the $31 per share price that Microsoft originally tendered for Yahoo.
"Despite a tough environment, I remain very optimistic about Yahoo's future," Yang said during a later conference call, held last Monday to discuss Yahoo's third quarter financial results. Yahoo also last week announced plans to lay off 10% of its workforce.
In trying to nail down business from Yahoo, Nebraska initially pursued each of the two facilities separately. But when it became event that the state was the front-runner for both, the two RFPs were consolidated into a single proposal.
Ultimately, the Nebraska Advantage Act -- a bill providing economic incentives to companies locating in the state -- was rewritten to include benefits for all businesses related to "Web portals," instead of just "data centers," so as to allow for the inclusion of the customer data center. Yahoo will get tax breaks under the program.