Yahoo Considers NY State for Data Center

Yahoo is considering several sites in Western New York for a major data center, according to New York state officials, who are seeking to leverage the area's supply of hydro power to attract the huge Internet company. Discussions between Yahoo and officials in Gov. David Paterson's administration began about six weeks ago, according to the Buffalo News, which said the New York Power Authority (NYPA) has been directed to work with Yahoo on the company's requirements.

"They are seriously, seriously considering a site in Orleans County or Genesee County," Sen. Chuck Schumer told the News. "They are considering other sites ... but Western New York is at the top of the list. If Yahoo locates in Western New York, it would be an eye-opener for many other types of firms to look at us."

Genesee and Orleans counties are each east of Buffalo, not far from the Niagara River and its supply of hydro power, which has been a major attraction in helping central Washington state attract major data center projects - including one of Yahoo's largest company-built facilities in Quincy, Wash.. But serious questions remain about the NYPA's ability to deliver capacity to large industrial users. Last month Steel Development Co. abandoned plans to build a $200 million plant in Western New York when the NYPA could offer only 17.5 megawatts of capacity, half the 35 megawatts the company was seeking. Local media report that Google also considered a data center in the area, but was unable to finalize a deal with the NYPA.

New York officials believe the region also offers a suitable climate for the use of fresh air in data center cooling (air-side economization), which Yahoo has used extensively in several of its recent data center projects.

The Niagara region's hydro power had previously been a key carrot in state officials' efforts to attract a major data center project for HSBC bank. After initially agreeing to build a $139 million data center in the Buffalo suburb of Cambria, HSBC ultimately cancelled the project and announced plans to consolidate its Buffalo-area operations in a new facility in Chicago.

The report suggests that Yahoo continues to look at expanding its data center network, even as rivals Microsoft and Google have scaled back their building programs, delaying existing projects. Yahoo has built less aggressively than its competitors, and has saved money and time by leasing wholesale data center space and retrofitting existing properties. Last year Yahoo leased turn-key data center space in Santa Clara, Calif. from Digital Realty Trust and announced plans to retrofit a property in La Vista, Nebraska