Yahoo Restructures - Will the Changes be Enough?

Along with the merging of products, Charlene Li, an analyst at Forrester Research, thinks that users will be able to integrate their identities across Yahoo properties so that they aren't islands anymore. Currently, if you have a Yahoo email account and are also registered to use other Yahoo products, such as Flickr or Del.icio.us, you have to log into each one separately. "The new centralized technology group will certainly help rationalize such inconsistencies," Li notes.

Yahoo even seems to have a new mission statement to go with its reorganization (or at least one I haven't noticed in their literature before): "Yahoo!'s mission is to connect people to their passions, their communities, and the world's knowledge." This fits in well with what Li thinks is most important for any search engine going forward: "In the end, the race is not to be the best search engine technology-wise, nor to have the most advertisers. It's about being relevant to your audience, no matter where they go or what they do." It certainly sounds as if Yahoo realizes that. But how well will they execute?

That seems to be the unspoken question on everyone's lips. The full results of this shake-up won't be obvious for some time, and not everyone is sure that it's enough to fix Yahoo's problems. Imran Khan, an analyst at JP Morgan, notes that "The coming year will be challenging, in terms of numbers" for Yahoo. And the company's current position in the market will be difficult to overcome. "The management change doesn't fix the problem...There are lots of new competitors and Yahoo is not as well-positioned in search as Google."

It's been noted that Yahoo could maintain and grow its market share by stealing users from MSN and many competitors who have a smaller market share, if it isn't quite ready to take on "the Google." Its new structure is designed to address the issues of ineffective user monetization and duplication of effort. But perhaps it's a certain lack of hunger to be number one, to gain some kind of focus and to want to excel in a particular area, that has been most fatal to Yahoo. Whether the search engine has rediscovered that hunger, and can turn that into a will to succeed that will carry them through the struggle in this cutthroat market, remains to be seen.