Yahoo Restructures - The Power of Three
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The reorganization is about a lot more than heads rolling. The company will now boast three major units, whose heads will report directly to CEO Terry Semel. These include the Audience Group, the Advertiser and Publisher Group, and the Technology Group. One key point to keep in mind about this change is that, with it, Yahoo is now organizing itself "around audience segments and advertising customers, rather than around products," according to its press release. To me, that looks like a very real change, not just window dressing. So let's take a look at the three new groups.
The Audience Group, created by the merger of seven product groups, will be one of two customer-focused groups. The group's goal is to "enhance its existing products in search, media, communities and communications; build social media environment across Yahoo!; open more opportunities for users to take advantage of Yahoo! tools and services off network and through mobile and digital devices; and pursue growth opportunities in emerging international markets," according to Yahoo's press release.
A number of analysts have predicted that this means we'll see less duplication of effort and more moves to roll products and communities together, such as Del.icio.us and Flickr. Yahoo has made deals in the past concerning search and mobile phones and devices; that's likely to continue. In general, it looks like Yahoo is going to focus on its strength in social search and social media (thanks to the purchase of all those web 2.0 companies) and rationalize all these disparate parts so they'll work together. It's a good move, because a lot of people who are involved in online social communities like to find everything in one place. Currently, Yahoo is looking for someone to head this group.
The Advertiser and Publisher Group "will be created by combining Yahoo's broad array of marketing solutions, its industry leading sales teams, and its thousands of high quality distribution partners, to create a full-fledged global advertising network on and off Yahoo!," according to the company press release. If you read between the lines, you might be able to detect that its advertising network wasn't working together very well before. For example, Gavin O'Malley of Online Media Daily quoted a senior media buyer complaining about Yahoo's search and display sales teams not communicating with each other. "Their organization is set up in such a way that we could spend 50 million dollars in search, and not be recognized at all by the display people." This group will be headed by Yahoo CFO Susan Decker, who will continue to serve as CFO as well until a replacement is found. Many people are speculating that this move is a sign that Decker is being groomed for the top spot once 64-year-old Semel decides to retire.
Finally, the Technology Group, which will be headed by Chief Technology Officer Farzad Nazem, "will continue to support the entire organization...the group will be chartered with leveraging Yahoo's platform investments in community to create the technology platforms for new social media environments. In addition, it will have a mandate to speed the development of innovative, next generation advertising platforms beyond Project Panama to support the expansion of Yahoo!'s global advertising network," according to Yahoo's press release. In other words, a lot of engineers are going to be working very hard on social media and advertising, pretty much supporting the other two groups.
Next: Will the Changes be Enough? >>
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