The Channel Wire

October 24, 2008

In a move that is leaving many scratching their heads, Yahoo on Friday announced plans to open two new offices in Nebraska -- three days after it reported a whopping 64 percent plunge in third quarter net income and a 10 percent workforce reduction in order to cut costs.

A Yahoo spokesperson said that despite the company's woes -- which include an earlier layoff of 1,000 employees in February -- the company is "always looking for new ways to improve our infrastructure." "It is clear to us that to effectively compete we needed to better align costs but continue to invest in our priorities -- our customers."

The Sunnyvale, Calif.-based company's Nebraska operations will be a 150,000 square foot data center in LaVista, and a customer care center in Omaha, said Gov. Dave Heineman in a statement.

According to The Omaha World-Herald, Yahoo is reportedly making an investment of $100 million in the LaVista site. The papers said that the company was not yet sure how many Cornhuskers it will employ, but is expected to initially hire 50 people who will earn an average salary of $50,000 to $60,000 working at the La Vista center.

The company said it didn't know how many people would immediately be hired for the call center in Omaha. Yahoo is expected to initially hire 50 people, at an average salary of $50,000 to $60,000, for the La Vista operation. Heineman told the paper that the centers could potentially provide hundreds of jobs.

Heineman said that Yahoo reps began looking at sites in January with the goal of locating in the Midwest, and that he and other economic development officials made a case for Nebraska.

The plan worked: the governor said that Yahoo cited Nebraska's Advantage program as a major factor in selecting the state. Nebraska Advantage allows Internet Web portal companies to qualify for business incentives, i.e. tax breaks.

As part of the plan, The Omaha World-Herald said that state tax incentives were changed earlier this year to include benefits for "all businesses relating to Web portals rather than just data centers, which allowed Yahoo and Nebraska to tie the two projects together under the same incentives filing."

The incentives package has attracted interest from other tech companies as well. The Omaha World-Herald reported that PayPal is already located in LaVista.

Yahoo foe Microsoft has also committed to a $500 million operation in Nebraska and Google is building a $600 million data center, the paper reported.