A Yahoo spokesperson has declined to comment on reports that the search engine and portal giant has decided to lease 200,000 square feet of office space in downtown San Francisco - as did Rreef, which owns the buildings in question, 475 Sansome Street.

If this goes ahead, it will make Yahoo the first major tech company to move into San Francisco since Microsoft set up there five years ago - it will also make Yahoo the city's biggest tech resident - Microsoft has a mere 45,000 square feet at 1 Market St. Sun Microsystems contracted for 525,000 square feet at Foundry Square in 2000, but didn't move in and while other companies like Macromedia and Salesforce have headquarters there, they're much smaller in terms of both staff numbers and revenue. Yahoo has offices all around the world now and is recruiting aggressively -staff count grew 38 percent last year so this move would appear logical - it has 612 vacancies at its Sunnyvale headquarters. It's becoming increasingly more difficult to find people in the Peninsula and South Bay areas as other tech companies are hiring too so opening up further north might help.

Search leader and Yahoo's main rival Google has 354 openings at its Mountain View headquarters and it's hiring aggressively worldwide too. It's claimed that they're looking for a similar size space in San Francisco but that nothing's been signed - again, a spokesperson declined to comment.

Recent moves including a public offering of $4 billion to boost cash reserves to $7 billion, indicate intent to accelerate transformation from a purely search engine operation to a wider media company through aquisitions. Yahoo taking this 200,000 square feet, would push net absorption to nearly 800,000 square feet so far this year, reduce the 17 percent vacancy rate in the city and, possibly, push asking rents higher.