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Yahoo May Spin Off Hadoop Engineering Unit

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Yahoo (NSDQ: YHOO) is considering spinning off its Hadoop engineering unit into a standalone entity that would continue to develop the open source Java-based software and generate fees from related consulting, the WSJ reports, citing unidentified sources.

Yahoo has nurtured the Hadoop unit for six years. Yahoo uses the software to detect Yahoo mail for spam, figure out which stories to place on its home page and pick contextual ads for viewers. Other companies, including eBay Inc. (NSDQ: EBAY), Facebook Inc., and Twitter Inc., use the software as an analytics tool as well.

One possible scenario for the spin off would have Yahoo partnering with and take a significant stake in the new company. There are already outside companies that distribute Hadoop software, so Yahoo would ultimately be using the developer to compete against those established companies, such as IBM and Cloudera, the WSJ noted.

While Yahoo didn’t have any official comment, Rob Bearden, a partner at Benchmark Capital, told the WSJ that the VC firm has been in discussions with Yahoo about how it might form a Hadoop company. Bearden called Hadoop “the biggest movement in enterprise-software in years.”