Update: Yahoo trumpets reorganization

IDG News Service - Under fire from angry shareholders and rocked by a stream of high-profile executive departures, embattled Yahoo Inc. today announced another reorganization, its latest attempt to snap out of its years-long technology and financial funk.

Stressing its goals of being the "starting point" for most Web users and a "must buy" for most online advertisers, as well as the most attractive platform for developers, Yahoo will now centralize its product development operations.

It will also create a business region just for the U.S. and its end users, advertisers and Web publishers. In addition, Yahoo will form what it calls an "insights strategy team" and enhance its technology infrastructure so that product designers and engineers will communicate and collaborate better.

"These moves accelerate the ability of our deep and talented team to build great products, grow our audiences and improve monetization globally," said Yahoo CEO Jerry Yang in a statement.

Reporting to President Susan Decker will be three new teams:

• The audience products division, which will oversee product strategy and product management and be led by Ash Patel, former manager of Yahoo's platforms and infrastructure group.
• The U.S. region, which will be led by Hilary Schneider, previously chief of the company's global partner solutions group.
• Insights strategy, which will be in charge of centralizing and executing "a common strategy for the use of data and analysis across Yahoo." The chief will be named later.

The new organizational structure will improve Yahoo's products and speed up decisions, the company said.

In technology and infrastructure, Chief Technology Officer Ari Balogh will be in charge of developing a "world class" cloud computing and storage infrastructure, unifying platforms and improving the communication between product developers and engineers.

As a result, Yahoo will create a cloud computing and data infrastructure group and move all the teams that work on end-user services and sites to the audience technology group under the guidance of Venkat Panchapakesan.

On paper, the reorganization looks like it could help simplify and streamline key processes in order to help Yahoo achieve its major goals, said industry analyst Greg Sterling of Sterling Market Intelligence. However, it's hard to predict whether the plan will have its intended effects, because there are a lot of internal elements and dynamics that drive reorganizations but remain shrouded to outsiders, Sterling said.

"Reorganizations are very hard to second-guess because you don't necessarily know the people who are getting promoted or shifted around, and you don't see a lot of the internal considerations driving the decisions," Sterling said. "There's a lot of opacity there."

Based on their track records, the people being put in charge as part of the reorganization seem capable and respected, and it will be key for them to inspire confidence in the employees and generate enthusiasm among them, Sterling said. "You can reorganize and reorganize, but if you don't have strong leaders and engaged employees, then you won't get the desired results," he said.