Bangalore: Internet search engine Yahoo Inc.’s local unit says it is driving the development of new products in areas such as video, image, mobile and job search applications helping the firm improve revenue at a lower cost while expanding its reach in the local market.

After an unsuccessful takeover bid by Microsoft Corp., the world’s largest software maker, and subsequent internal churn and shareholder activism Yahoo has scaled up its presence significantly in Bangalore and uses local talent to manage products such as Hotjobs and Yahoo Weather. The engineering site in Bangalore also hosts most teams that design key products for multimedia search for the company.

“We are creating impactful jobs and that’s helping us to attract people,” said Sharad Sharma, chief executive officer of Yahoo Software Development India Pvt. Ltd.

The research and development (R&D) centre in Bangalore is the only one outside of the company’s headquarters in Sunnyvale. It is not only focused on product engineering but also manages products. Yahoo R&D employs 1,500 people in the country.

“Major output of the Indian R&D arm has been developing products such as spamguard and SMS (short messages for phones) solutions that have been able to make Yahoo competitive,” said T.R. Madan Mohan, partner of Browne and Mohan, a consulting firm that focuses on strategy and technology.

Yahoo is also developing products for the local market, even as it focuses as a hub for global development. “(Focus) on local (market) is a big strategy and we are linking it up with our SMB (small and medium-size businesses) offerings,” said Sharma.