GreenXchange: What's in it for Yahoo!?

Madeline Ravich | Friday 12th February 2010

Those of you who saw my last post on the GreenXchange read some of my lingering questions about the sustainability of its financial model. To better understand how companies will be incentivized to use the platform on an ongoing basis, I spoke with Chris Page, Director of Climate and Energy Strategy at Yahoo!. Since her company is one of the four founding companies currently posting patents on the GreenXchange patent marketplace (the others are Nike, Best Buy, and Mountain Equipment Co-op), I thought it would be helpful to hear her explain how Yahoo! was planning to use--- and benefit from--- the GreenXchange.

Before talking about Yahoo! specifically, Ms. Page walked me through how the GreenXchange actually works. As she explains it, there are two types of licenses offered through the GreenXchange, the first for academics and the second for commercial use. Academics and researchers are allowed to use the license for free but in return have to promise a) not to use any innovations or applications they develop using the licensed technology for commercial purposes and b) to feed their innovations back into the GreenXchange (how this will work is still being fleshed out). Commercial users pay a flat fee to license a chosen technology, although the terms of use for each patent may prevent direct competitors from taking advantage of this (Google, you're on your own!).

For a company like Yahoo!, there are some real, tangible benefits to being involved. With energy prices high and U.S. climate change regulation looming, companies like Yahoo! have invested considerable amounts of money in developing technologies that reduce the energy consumption of their data centers. And while these investments are already paying off in the forms of considerable energy savings, it would be nice for Yahoo! to be able to recoup some of this investment in other ways as well.

Right now, as Ms. Page stressed, there is no way of coming close to imagining all the potential applications for Yahoo's new data center technology. Implicitly, there is also no way of knowing how much money could be made through a forum for licensing this technology to other companies with similar energy issues. The upside for Yahoo! is that it may be able to claim contributions to society while also potentially raking in revenue for use of its patented technology. The upside for those licensing Yahoo!'s technology is that they won't have to spend oodles of time and money trying reinvent the wheel, and should save money in the process.

Now, one might argue (and some have) that patent information is already available to the general public through the U.S. Patent Office. This is true. However, Ms. Page makes the point that the U.S. patent website is not-so-user-friendly. By contrast, the GreenXchange website essentially presents patent information in three languages: one for machines, one for lawyers, and one for regular people. This makes the information far more accessible than it has even been before.

All this said, there is one more upside which should be interesting to members of the CSR community. If you have ever read a CSR or sustainability report, you know that companies compete in the CSR ratings and rankings to demonstrate the most dramatic measurable results. Today, Yahoo! can claim its own energy reductions, but tomorrow, with the GreenXchange's help, it could count your sustainability savings as well.

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