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The halo effect of Yahoo!

“The City reached a development agreement with Yahoo! to retain and expand local operations. The project will result in significant expansion in the University of Illinois Research Park and add…new employees. Yahoo! is a flagship technology employer and actively engaged in outreach at the University of Illinois.”

It reads like the prose of a dry, government document and it is. The excerpt comes from the 2012-2013 Comprehensive Plan Annual Report that details the comings and goings and the significant plans of the City of Champaign. The idea is to establish a community vision, an idea of where we are going as a community, and how we are going to get there.

There, Yahoo! comes in.

Catherine Singer is the Senior Director of the Yahoo! Champaign branch and she explains the benefits of the expansion in a nutshell. There will be eighty new jobs, some of which will likely go to local candidates and some of which will likely go to people from other states. Those who get the jobs will get them based on merit.

As far as she can tell, there are no set allocated jobs for people in Illinois—Yahoo! is interviewing all across the country to fill these positions, though she notes that most of the job positions seem to end up in the hands of people from Illinois.

“I know it will be a mix,” Laura Frerichs, the Research Park Director, said. She says that jobs will possibly go to people from other states, maybe even other countries. “Yahoo! is looking to fill two types of positions. There are data scientists and back or front end software developers.”

A quick perusal of the Research Park online job board results in four jobs that Yahoo! added just a week after the ground-breaking ceremony for its new building. There are front end and back end software developers, data collectors, and a database team member.

Both Catherine and Laura note that Yahoo! is looking primarily for individuals with computer science backgrounds—either formally through a degree or with a wealth of experience. Sometimes the people filling those positions are recent graduates—Yahoo! offers around 10 internships for students nearing their final academic year at the University of Illinois—and sometimes they go to more experienced workforce members.

But it remains to be seen—will this be a good deal for the City of Champaign?

To stay in Champaign and expand its workforce, Yahoo! received two specific tax incentives that made the deal more lucrative for the company. First, the City will pay Yahoo! three dollars per square foot of space for the construction of its new building. Second, the City will pay Yahoo! $1000 per new employee.

The tax incentives are primarily performance-related. Add an employee, get $1000. Build another square foot, get $3. The idea is to reward companies that build in Champaign, whether that means building a building or building a workforce.

Yahoo!, even before the expansion, ranked as one of the top employers in Research Park, and the Yahoo! Champaign workforce has a very high retention rate. In other words, when people get here, they generally stay.

Laura Frerichs puts it better: “Yahoo! is one of 14 publicly traded companies in Research Park. It employs professionals, has the largest base of full-time employees, and there’s the Halo Effect of the Yahoo! name.”

And it’s the Halo Effect that may have caught other’s attention as well. After all, Yahoo! is a big name and the press release sent out the day of the ground-breaking ceremony wound up on the online pages of the Wall Street Journal.

But it still remains to be seen—will this deal be good for the City of Champaign?

Yahoo! runs two operations out of its Champaign location: a data pipeline which tracks and optimizes content for digital advertising and the Hadoop Center of Excellence, which focuses on data analysis and the programming of the Hadoop open-source code.

A case study on the Research Park website explains it further: “As a Hadoop Center of Excellence, a team of engineers works on Hadoop, an open-source software framework that allows massive data processing distributed across thousands of nodes and petabytes worth of data.”

And: “Another team works on a data pipeline project that handles, aggregates and processes data generated from clicks on Yahoo!’s advertising platforms.”

The team of engineers at Yahoo! Champaign is also known for its innovation, with patents in the double-digits, which is remarkable considering they aren’t even a research team. Furthermore, Yahoo! Champaign has partnered with many University of Illinois professors to help out with research projects, including the fabled cloud computing which the Hadoop Center of Excellence is known for.

And on top of that, Yahoo! Champaign is active in the community, distributing grants to the Crisis Nursery, helping with the Habitat for Humanity, and lecturing in STEM schools and other capacities.

Ultimately it is a deal, a package of tax incentives for the presence and services of a leading technology company in the world. Yahoo! brings name recognition to Champaign in addition to the University of Illinois, and that kind of recognition may bring even more companies. And Yahoo! brings quite a bit to the community, even after the grants and lectures and other acts of service.

But it still remains to be seen—will this deal be good for the City of Champaign?

Only time will tell.

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