Yahoo Restructures - News and Goals of the Shake Up
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Many of us first learned that a restructuring was probably in the works from a Wall Street Journal story a few weeks ago that leaked an internal memo from Yahoo. That memo, written by senior vice president Brad Garlinghouse, said that Yahoo needed some kind of shake-up and should lay off about one-fifth of its work force. Garlinghouse complained that "We lack a focused, cohesive vision for our company. We want to do everything and be everything -- to everyone."
The shake-up is now well underway. Three high-level executives are leaving: chief operating officer Dan Rosensweig; Lloyd Braun, head of the media group; and John Marcom, senior vice president of international operations. I wouldn't read too much into Rosensweig's exit, since the new structure seems to unite the roles of CEO and COO (which unfortunately made the COO redundant). Braun's exit, however, was rumored to be in part as a result of a disagreement, and we can expect to see less original programming from Yahoo as a consequence.
But if this reorganization was only about firing people, it would leave Yahoo little better than it was before. Where's the vision and focus in getting rid of people? Indeed, Yahoo CEO Terry Semel recognizes that point when he talks about the change. "The Internet is continuing to grow and evolve at a rapid pace, and we're reshaping Yahoo! to be a leader in this transformation, just as we did successfully five years ago. Our strategy capitalizes on big emerging trends and leverages or core strengths in search, media, communities and communications. We believe having a more customer-focused organization, supported by robust technology, will speed the development of leading-edge experiences for our most valuable audience segments. In turn, we plan to drive growth and profitability by leveraging our deep audience insights to create a full-fledged advertising network, with a marketplace that meets supply and demand both on Yahoo!'s valuable owned-and-operated network and across the entire Internet."
Those are fine words, and certainly rallying words for the troops. But what kind of action is Yahoo taking on those words? Well, by the time the search engine is done, it almost won't look like the same company. As you'll see, the reorganization is designed to make it leaner, more nimble, and more able to respond to problems as they come up.
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