Exclusive: Yahoo Courts Former News Corp. Digital Exec Ross Levinsohn As U.S. Head

Kara Swisher, On Tuesday October 26, 2010, 3:11 pm EDT

He’s baaaaaack.

Former Fox Interactive Media President Ross Levinsohn, that is, who is the top candidate to replace Hilary Schneider as Yahoo’s U.S. head, according to several sources close to the situation.

While the deal is not completely struck, sources said Levinsohn is very close to taking the job.

Sources added that if he does, he is likely to remain living in Los Angeles, where he has long been located.

The move is a bold one for Yahoo CEO Carol Bartz, who desperately needs to bring in major Internet talent to the company.

Yahoo has been rocked by management turmoil–especially in the media and advertising unit–and also by troubling weakness in revenue growth and innovative spark.

Levinsohn, one of the more colorful of Web personalities, certainly has the spark.

Levinsohn is currently an investor at Fuse Capital, which funds digital media and communications start-ups.

But sources said he has been itching to get back to a big company with scale in the digital media business and has been interested in Yahoo for some months.

At Yahoo, presumably, he will have purview over what Schneider did (and perhaps more), including the Silicon Valley Internet giant’s powerful media properties and its large advertising sales force in the U.S.

It’s likely Yahoo will hire a major ad sales exec to work under Levinsohn, and sources said the company has been in contact with several prominent execs to fill the slot left open after the March departure of Joanne Bradford to Demand Media.

Besides Schneider, also among the recent departures in the unit Levinsohn would run: VP of Media Jimmy Pitaro, who went to Disney, and Audience head David Ko, who moved to social gaming phenom Zynga.

Until now, Levinsohn is best known for his stint running digital operations for News Corp.’s then FIM unit.

It was at FIM that he rose to prominence after he bought MySpace, the social networking site that was once the hottest property on the Web.

At the time, Levinsohn and other execs also struck a gigantically lucrative advertising search deal with Google that garnered MySpace huge revenues.

After leaving News Corp. after repeated clashes with MySpace co-founder and CEO Chris DeWolfe, he partnered with former AOL CEO Jon Miller in another investment company, Velocity Capital.

Ironically, both Miller and Levinsohn were the top choices of billionaire shareholder activist Carl Icahn as the execs he wanted to run Yahoo when he was agitating for change there a few years back in the midst of the failed takeover attempt by Microsoft.

When reached today, Miller–who now is the Chief Digital Officer of News Corp.–declined to comment on his former associate.

But he said: “If Yahoo is so lucky to get Ross, it would be great, because he is one of few people who understands all media.”

Indeed, Levinsohn is better known as a dealmaker and media exec than as a sales expert, although he did manage digital advertising properties at FIM.

Previous to FIM, Levinsohn ran Fox Sports Interactive Media. He has also worked at the AltaVista Network–an early search pioneer–CBS Sportsline and Time Warner’s pay cable giant HBO. In addition, according to his bio at Fuse, he also worked at Saatchi and Saatchi and in sports management and marketing at ProServ and Lapin and Rose Communications.

Yahoo declined to comment about the possible appointment of Levinsohn.

(And let’s hope Yahoo–especially the hip-shooting Bartz–doesn’t announce his arrival by also unfairly kicking former execs in the media and advertising unit in the teeth, as has been cloddishly done already on the down low.)

BoomTown has contacted Levinsohn via email and phone and has not heard back from the typically voluble exec.

But you can enjoy his stylings here, in an interview I did with him in 2007:

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Yahoo opens its 'chicken coop' green data center

Yahoo’s newest data center, a 155,000-square-foot facility in upstate New York, uses 40 percent less energy and 95 percent less water than conventional facilities.

The energy-efficient data center has a variety of unique traits. It gets almost all of its cooling from outdoor air, giving it a power usage effectiveness rating of 1.08, which is significantly below the industry average of 1.92. The data center, which is capable of holding 50,000 servers, has been designed like a chicken coop: the long, narrow buildings make it easier to circulate in outdoor air. The building itself is also positioned to take advantage of the prevailing winds.

Dubbed the Yahoo Computing Coop (YCC), the facility doesn’t contain any chillers. “It’s a passively cooled facility, much like you’d find in chicken coops,” explains Christina Page, director of climate and energy strategy at Yahoo. “It’s designed to maximize the pass of airflow. This is how we cooled buildings before we used the mechanical brute force of chillers.”

The data center will run Yahoo services like Mail, Messenger and Flickr.

The data center is touted to use 40 percent less electricity than typical data centers and will only spend one percent of its energy bill on cooling. Yahoo is currently seeking a patent for its Chicken Coop design that it could use as a model when building future data centers. The company, which has been looking to reinvent itself in the wake of Google’s rise, clearly has not lost its innovative roots.

The U.S. Department of Energy gave Yahoo a $9.9 million grant toward the cost of the facility. The DOE wants to encourage better energy practices in data centers, which account for a growing proportion of U.S. energy use.

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Yahoo Is Pretty Much Worthless, In Wall Street's Opinion

Image: AP

With Yahoo's shares trading just over $14, investors are telling the world that its core business is worthless, says Aaron Kessler of ThinkEquity.

Kessler did a sum-of-the-parts analysis of Yahoo, and estimated that Yahoo's assets are worth $15.29 per share in total. If you discount 30% to factor in tax implications from selling, Yahoo's assets are worth $9.50 per share (not counting cash).

In other words, if you stripped out the strategic investments and just looked at Yahoo's core business, it's only worth $4 or less, says Wall Street.

Here's the breakdown via Eric Savitz at Barron's:

Yahoo! Japan: The company owns a 34.9% stake; on an undiscounted basis, he calculates, the stake is worth $4.88 a share. Alibaba.com: Yahoo has a 29% stake, worth $2.10 a share on an undiscounted basis. Alibaba Group: Yahoo has a 40% stake, which he estimates is worth $5.61 a share. The company has $2.70 a share in cash.

See Also: Sorry, Carol Bartz Says She's Not Selling The Alibaba Stake

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Yahoo opening buoys hopes for attracting more

Yahoo formally opened its state-of-the-art data center in Lockport on Monday, in what company executives and local economic development officials say will be the first of several high-technology companies to locate sophisticated facilities in Western New York.

Carol Bartz, the Internet giant's CEO, joined Gov. David A. Paterson, Sen. Charles E. Schumer and a host of other state and local politicians in unveiling the new "server farm" at the Town of Lockport Industrial Park.

The project highlights the Sunnyvale, Calif., company's first use of a new environmentally friendly design that relies in large part on Western New York's cooler climate and the availability of low-cost hydropower to conserve energy and save on electricity costs.

"We're thrilled to unveil our world-class data center in Lockport and take an active role in the community," Bartz said. "Yahoo is serious about sustainability and is leading efforts to address climate change. That's why we believe in creating highly efficient data centers that minimize the impact on the environment."

With about 50,000 computer servers, the new facility will be the company's East Coast data center, powering Yahoo's network of sites that includes its e-mail and instant messenger service and Flickr. It began operations quietly several weeks ago, hosting the e-mail accounts for Yahoo customers on the East Coast.

The facility opened just 13 months after breaking ground in a muddy field in August 2009. Now that the central facility is open, company officials said, they can add more buildings in as little as six months.

The $150 million data center created up to 500 jobs during construction and will have at least 125 full-time employees -- 100 are already in place at the 155,000 square-foot site. But officials said they hope it will be the start of an even larger presence by Yahoo in Western New York.

"On every angle, what we've done in our project thus far is just a seed, almost a test to a certain extent," Scott Noteboom, Yahoo's vice president of data center operations and engineering, said in an interview. "Buffalo isn't just about a data center. We would like to spread our functions in more areas like Buffalo."

The second phase of Yahoo's project isn't even completed -- construction started in June and is slated to wrap up by December -- and local economic development officials are already seeing interest from other large technology-oriented firms.

"This project has put everything on the map and generated all the interest in the region," said Paul Pfeiffer, spokesman for the Buffalo Niagara Enterprise economic development organization.

"There are a number of high-technology, well-known companies that are interested in Western New York," said Richard M. Kessel, president and CEO of the State Power Authority. "It's low-cost power that will make it or break it. We will do whatever we can to do that."

In particular, sources said on condition of anonymity, local officials are courting a much larger data center project for Verizon Communications that would dwarf Yahoo's in size and scale. The New York-based telecommunications giant is considering Western New York along with two other states.

Sources said Verizon is considering property owned by energy firm AES Corp. in the Town of Somerset in northeastern Niagara County, immediately adjacent to the AES power plant, as well as in the nearby Town of Shelby in Orleans County. A decision is expected by year's end. Other companies have also indicated interest in Western New York, including Twitter, but Verizon is much further along in the process, the sources said.

"Having an international company of Yahoo's caliber establish a presence in Lockport opens the door to enormous possibility in locating other high-tech companies to Western New York," Paterson said, without being specific.

Meanwhile, Yahoo and Power Authority officials confirmed they have begun negotiations about getting additional low-cost hydropower to support an expansion of the project beyond what was already envisioned. The project was originally granted 15 megawatts of low-cost power by the Power Authority as one of the critical inducements to lure Yahoo here.

"We are currently under discussion with [the Power Authority] to further expand Yahoo's footprint in this location," said Yahoo Executive Vice President David Dibble, citing the possibility of "greater diversity of jobs" as well.

Data centers are hard to move once they are established and are difficult to put offshore, since they have to be within a 1,500-mile radius of the "end-users." So "when we build a data center, it's in our interest to continue to grow there," he said. Internally dubbed the "Yahoo Chicken Coop," the long, narrow design mimics a chicken coop to encourage natural air flow, using free cooling more than 99 percent of the time, so that less than 1 percent of a building's energy consumption is used to cool it.

Instead, it uses a combination of the area's cooler climate, prevailing winds from Lake Ontario and low-cost hydropower to keep the 120-foot-by-60-foot server buildings cool. That significantly reduces electricity use, so its power usage rating is about half that of the industry average.

Specifically, the company said, the data center will use at least 40 percent less energy and at least 95 percent less water than conventional facilities.

It also does not require wastewater treatment for its cooling system, while similar-sized centers result in more than 5 million gallons of wastewater. "This building here sets the standard by which data centers the world over are being measured," Dibble said.

In recognition, the company received a $9.9 million sustainability grant from the U.S. Department of Energy -- the largest award provided under the government's Green IT grant program.

Operationally, the facility includes the primary data center, as well as one of the company's global services desks, which provide technical help to Yahoo employees around the world.

Perhaps most significantly, it also includes one of the company's two global operations centers, which monitor the international network of Web sites and services to ensure they are up and running 24 hours a day. That operation had been in Bangalore, India, but the company closed it to bring the work to Western New York.

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Yahoo opens green 'chicken coop' datacentre

Yahoo has opened a new a datacentre which it claims represents a dramatic leap in energy efficiency and design. Skip related content

Located in Lockport, New York, the datacentre operates with far lower energy and cooling costs than conventional datacentre facilities, the firm said.

Yahoo deliberately chose the colder climate of upstate New York to provide cooler air which can be pumped into the facility to help keep server hardware cool.

"Yahoo is one of the first companies to establish a world-class datacentre in western New York and to take advantage of the area's climate, clean hydropower and qualified workforce," said David Dibble, executive vice president of service engineering and operations at Yahoo, in a blog post.

"We are helping to establish the region as a technology centre of excellence, and we expect others will follow suit."

The 120ft by 60ft server buildings were constructed using an elongated 'chicken coop' design which Yahoo said helps to circulate the outside air within the building.

The result is a facility that uses 95 per cent less water and 40 per cent less energy than conventional datacentres, according to Yahoo.

The Lockport facility will help deliver financial, sports and news services, Flickr, Yahoo Mail and Yahoo Messenger.

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