Yahoo's Green Stamp

With an eye toward bolstering its own new branding effort and the health of the planet, the mighty Web presence introduces another environmental initiative

by Catherine Holahan

Yahoo! executives are turning green—and not because they're enviously eyeing market-share gains by a certain Silicon Valley rival. On May 14, Yahoo launched a new environment preservation site, Yahoo! Green, along with a nationwide competition aimed at reducing pollution in U.S. cities. The initiative is an extension of the company's in-house efforts to reduce carbon emissions in its offices and data centers. Yahoo is hoping its overall efforts will result in a strong bottom line and a healthier planet.

Based in Sunnyvale, Calif., Yahoo (YHOO) has long tried to cultivate a green image. It is known for shuttling employees to work in biodiesel buses and has an in-house "green team" made up of 100 employee volunteers who suggest environment-friendly improvements to operations. Co-founders Jerry Yang and David Filo have twice wrestled in ivy-laden sumo suits to reward employees for reducing nonrenewable energy resources.

One of the hopes is that this latest initiative, named "Be a Better Planet," helps jump-start the company's branding campaign, "Be a Better"—the purpose of which is to communicate that Yahoo's services and search engine can help users be better at anything they choose.

Community Involvement

Reducing carbon emissions has become something of a cause célèbre, due in part to the popularity of Al Gore's global warming documentary An Inconvenient Truth and new reports concerning the impact of greenhouse gases. Yahoo hopes to convert burgeoning interest into action by giving people information about their impact on the environment. The more people know about the effect they have, the more likely they are to reduce energy consumption, says Filo. "I think it's an education issue," he says.

Yahoo hopes that tapping into the public's environmental interest will also generate more enthusiasm for the company's sites. In addition to Yahoo! Green, which will soon feature environmental headlines from Yahoo's news site as well as content from environmental groups, the company is including environmental content on its Yahoo! Autos, Yahoo! Mobile, and Yahoo! Answers sites. Filo says the company plans to gradually expand environmental initiatives to other Yahoo properties as well.

By the end of 2007, the company plans to become "carbon-neutral," meaning it will give back to the environment whatever it takes by reducing its own carbon emissions and supporting environmental efforts that make up for the pollution it creates. The company's efforts, including the development of less energy-intensive ways to cool the massive servers in its data centers and locating centers in cooler climates, aim to reduce power bills. "There is a positive impact on the bottom line," says Filo.

Cool It

Reducing energy consumption has become a serious challenge for growing tech companies, which must heavily air condition server rooms to ensure the powerful computers do not overheat. The larger the company, the more servers it likely needs to run its business and the more it spends on electricity bills. Left unchecked, some say energy costs could rise from 10% of the IT budget to 50% (see BusinessWeek.com, 5/14/07, "Averting the IT Energy Crunch").

Yahoo isn't the only one pledging to significantly reduce its energy use: Tech companies from AMD (AMD) to Verizon (VZ) are trying to reduce power consumption—though a May 14 report by Forrester Research (FORR) suggests that more companies need to actually take action, instead of merely planning to do better (see BusinessWeek.com, 5/14/07, "It's Not Easy Buying Green"). Filo says the same can be said of consumers, adding: "We just need to convince people that it is worth doing."

Holahan is a writer for BusinessWeek.com in New York.