Wednesday, December 06, 2006 01:00 PM PST
Yahoo will reorganize into three new units, as part of a shake-up that will see chief operating officer Dan Rosensweig leave the company, Yahoo said today.
The company said that the new groups will help it focus on its most important customer segments--the consumer audience, advertisers, and publishers--so that it can compete more aggressively.
Once an Internet and Wall Street darling and consistently one of the Internet's top three sites, the company has struggled in the face of a changing Internet landscape, including the rise of social networking sites and sharp competition from rivals such as Google.
The move was not entirely unexpected. Last month, an internal document now known as the "Peanut Butter Memo" called for reorganization. The memo's author, Yahoo senior vice president of communications and communities Brad Garlinghouse, accused the company of involving itself in too many separate activities, spreading itself too thin, like a layer of peanut butter; Garlinghouse said that Yahoo should focus instead on key areas. He also recommended imposing up to a reduction in headcount of 20 percent, though no cuts were announced in Yahoo's Tuesday statement.
Reorganization
The new units at Yahoo are named the Audience Group, the Advertiser & Publisher Group, and the Technology Group. Each group's head will report directly to CEO Terry Semel.
The Audience Group will focus on the company's existing consumer products, such as search, Web-based e-mail, and news aggregation, while also developing social networking, mobile and handheld content, and international offerings. Yahoo said that a search was underway for a group head.
The Advertiser & Publisher Group will handle advertising and relationships with Yahoo partner publishers. It will be responsible for creating a global advertising network both on and off Yahoo sites, though the company did not go into operational specifics; recently Yahoo partnered with U.S. newspapers to provide targeted local advertising. Yahoo's chief financial officer, Susan Decker, will oversee this group, relinquishing her current title. The company will seek a replacement for her as CFO, Yahoo said.
Yahoo's new Technology Group will be charged with building and maintaining the infrastructure for these new efforts, and will continue its work on Project Panama--an initiative that is believed to involve development of a new advertising system to compete with Google's AdWords, with ads served according to search terms that users enter. The company's chief technology officer Farzad Nazem will head the unit.
The new units and titles will take effect beginning January 1, 2008. Rosensweig will leave at the end of March, Yahoo said. The company did not announce a replacement for Rosensweig as COO.