Beijing, China — US Internet pioneer Yahoo yesterday unveiled plans that it will open a global research and development center (R&D) in Beijing to tap into China’s pool of intellectual talent as it focuses on research on search, advertising, cloud computing, and other personal internet tools and technologies, besides seeking to reduce costs, state media said Wednesday.
The centre, one of Yahoo’s third addition to global R&D networks, with the other two located at its US headquarters and in India, will focus on search, advertising, cloud computing and other personal Internet tools and technologies, said Jeff Kinder, senior vice-president, Yahoo Media Products & Solutions.
The R&D center will also focus on developing Yahoo’s core platform globally, Kinder said.
“The main reason for us to establishing the centre here is the deep pool of engineers and scientists the country has. We will also optimise our cost structure,” said Kinder, according to the report.
The company, however, declined to disclose the value of the investment or the number of staff the centre planned to employ, the paper said.
The new facility will function independently from the Alibaba Group, which is China’s biggest e-commerce portal and also controls Yahoo’s operations in the country, the report added.
“It is worth noting that the new center is independent of Alibaba,” Kinder said.
Yahoo owns 39% of Alibaba, which also runs China’s top online auction site Taobao.com and business-to-business e-commerce platform Alibaba.com, the report said.
Yahoo wants to take advantage of China’s abundant supply of scientists and engineers. The Beijing center will mainly do “science-driven engineering work”, Zhang Chen, head of the center, told China Daily.
“The new R&D center is another example of Yahoo’s long-term commitment to engage with the Chinese technology community,” Aristotle Balogh, Yahoo’s chief technology officer, said in a statement.
The launch of the Beijing centre came after Yahoo reported a nearly 80% slump in its net profit in the first three months of the year due to the economic downturn and said it would trim its workforce by five percent.
Since Yahoo’s new Chief Executive Carol Bartz took office this year, relations between the company and Alibaba have been rocky according to media reports.
Yahoo’s Bartz has been taking a series of measures to turn the company around and has said the company intends to bolster its ranks of engineers while shaving away unneeded layers of management.
The 60-year-old executive has revamped corporate organizational structure, replaced executives and cut costs including slashing 5% of the workforce.