"Yahoo is currently in the process of setting up its development centre and is expected to launch its operations on December 24.

In the next couple of months, Hewlett Packard will be starting its operations in Chennai with a total headcount of around 500 and plans to take it to 1000 in the next couple of years," he said, while addressing a two-day conference on 'Creating a New Generation of Entrepreneurs.'

Asked about the number of people to be employed by Yahoo, he said most of the new companies would like to start their operations with a team of around 100 people initially and might scale it up later based on requirements.

Yahoo Inc currently has a 25-member software professional team at iSoft Tech in Chennai, after it acquired US-based Stata Labs.

"Chennai has been attracting a good number of information technology and information technology enabled services in the recent past.

In the last 10 days, about seven companies have started operations in Chennai. Every second or third day, we see launch of operations by a new company," Harinarain added.

He also referred to the recent Gartner Analysis of Indian cities, saying that Chennai and Hyderabad could possibly replace Bangalore and Mumbai as favoured destinations for IT outsourcing.