Thursday, May 13, 2010

WTF? Yahoo plans to build a huge new campus in Santa Clara

According to IDG News, Yahoo has received approval to build 13 six-story and three two-story buildings on a new 46-acre campus in Santa Clara. The company spent $112 million to buy the property and will spend another $10 on transportation and other improvements. Yahoo's facilities have been scattered all over Santa Clara and Sunnyvale for years, so I can understand wanting to eliminate the inconvenience of getting between campuses, but a brand new, 15-building, 46-acre campus now? Really?

When a Silicon Valley company plans one of these "Taj Mahal" campuses, it's usually a sign that the wheels are about to fall off of its business, if they haven't already. Years ago, Atari built a huge central campus in Sunnyvale, and the company was effectively out of business before the complex was completed. First Apple, and later Cisco, planned to consolidate all their offices on a huge parcel in the Coyote Valley in far south San Jose, and both companies abandoned their plans when market conditions changed and their sales dried up. Borland built a huge office complex in Scotts Valley, complete with indoor swimming pool and athletic club, and ended up abandoning the facility after building only half of the planned buildings. Excite@Home built a huge two-building headquarters on the former Ampex campus in Redwood City. When the company went under, the buildings sat empty for years, a  "white elephant" in one of the most visible locations in Northern California.

There's a huge number of unoccupied and under-occupied buildings in Silicon Valley that Yahoo could lease at very favorable rates. Why build new buildings when there are plenty of buildings already available at fire sale prices? This decision, along with Carol Bartz's $47.2 million compensation package for her first year at the company, makes me wonder who's in charge at Yahoo and what they're thinking.
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