Yahoo! Inc. (NASDAQ:YHOO)’s new CIO and senior vice president of infrastructure, Mike Kail, was brought over from Netflix, Inc. (NASDAQ:NFLX) earlier this month to head up Yahoo! Inc. (NASDAQ:YHOO)’s IT and data center operations. As the Wall Street Journal reported last week, Kail’s top priority at this point is to continue the process of streamlining and consolidating the company’s data centers.
As Kail told the WSJ, owning and operating their own data centers is their number one objective at this point, which will allow them to improve their overall efficiency and cost savings, along the line of what Facebook Inc (NASDAQ:FB) reportedly achieved last year with their data center redesign; $1.2 billion in savings.
Yahoo! Inc. (NASDAQ:YHOO) has already begun that process over the past few years by relocating servers away from some locations, while expanding their privately owned data centers. One of those is in Lockport, New York, which Yahoo! Inc. (NASDAQ:YHOO) announced late last year would receive a $170 million expansion. That location is well-known for its unique chicken-coop design, which is a hallmark of Yahoo’s data centers, maximizing the flow of air around the structure to provide cheaper cooling.
As Kail said, it’s imperative they develop an infrastructure that can handle the scale of what they are planning, through many mobile endpoints. He sees no weakness in their data centers at present, but that tighter planning is in order.
The move precedes what is expected to be a major move by Yahoo! Inc. (NASDAQ:YHOO) into the realm of online video, a strategy which they have also been developing over the past several months. Yahoo has purchased the rights to several TV shows and movies, and has said they will also begin producing their own original programming, bringing them into more direct competition with Kail’s former employer.
Ken Griffin’s Citadel Investment Group hedge fund is a major shareholder in Yahoo with just over eight million shares as of their June 30, 13F filing.