Yahoo! reorgs! -- loses execs (and tubby-ATM)

You're fired! It's IT Blogwatch, in which Yahoo! does a major, major reorganization. Not to mention the last thing you want to see on a ATM screen...

Steven Schwankert has the schcoop:

Yahoo Inc. 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 Tuesday. The company said the new groups will help it focus on its most important customer segments -- the consumer audience, advertisers, and publishers -- in an effort to 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 like Google Inc.

The move was not entirely unexpected. Last month, an internal document now known as the "Peanut Butter Memo" called for such a reorganization. The memo, written by Yahoo's 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, and said it should focus instead on key areas.

John Paczkowski decodes:

Of course part of putting people in the right places to execute a new strategy is removing those who couldn't execute the old one. So in the coming months Chief Operating Officer Dan Rosensweig and Yahoo Media Group chief Lloyd Braun will leave the company. Remarkably Terry "I'm just along for the ride" Semel, who's fallen out of favor with Wall Street and perhaps even his own troops, will stay, although as many in the valley will tell you, he really shouldn't. Declining profits, a delayed ad platform and search market share losses make a three-legged stool suitable for kicking out from under a condemned man.

Om Malik chuckles:

If you have walked the streets of Manhattan, you have seen an all familiar scene: a street hustler playing three card monte, with a gaggle of unsuspecting tourists around him, betting that they can outwit and out-hustle him. They often lose, and go home disappointed. It is the same kind of feeling you get when you read Yahoo’s latest press release ... a collection of flowery words, which runs about 1,500 words doesn’t really paint a clear picture, and makes you wonder if anything will really change.

Yahoo says its business will now be divided into two groups: the audience group and the advertiser & publisher group, and each group will have two executives and a technologist attached to them. In other words, there will be one group that creates advertising opportunities aka inventory while the other brings in the revenue.

Terry Semel, Yahoo! Chairman and CEO:

Yahoo! is now entering what I call its third phase -- one focused on customers. We’re seeing the competitive and advertising landscapes evolve yet again ... By having our Audience Group 100% focused on creating great user experiences, we’ll also be able to create the greatest amount of value for advertisers, both on and off the Yahoo! network ... We intend to expand our global advertising network, creating marketplaces on both Yahoo!’s network as well as across the entire Internet ... We intend to focus our engineering investments and move towards more integrated product development teams.


Now, I know what you’re thinking — this is all about peanut butter. Actually, we’ve been orchestrating this plan for a number of months as we envisioned the next phase of growth for the Internet. Following our third quarter results, I very openly discussed that we were going to become more focused and bring about change. But let me stress that we’re organizing the company for growth and are continuing to hire great talent.

Erick Schonfeld:

Is Yahoo just reshuffling the deck chairs, or is it really trying to redefine itself? Ask some Yahoo employees what the company's mission is and they draw a blank, even now. For a long time, the debate was whether Yahoo was trying to be a media company or a technology company. But that distinction is meaningless now. All media companies, by definition, need to be technology companies or risk being left by the wayside. Yahoo, more than any other company, can become the place where you use technology to organize all of your media ... Yahoo needs to find what it does best and stick to it. Otherwise, it won't continue to be the most popular place on Web for long.

Baris Karadogan asks:

How come they could not name a person to run the Audience group when they have this many Vice Presidents? My knee-jerk reaction is that it will be almost impossible to find a person to parachute in and make an impact in the time that matters. Yahoo is a big and slow moving company. If this person is not in the ranks, then a massive clean up is needed.

snidleywhiplash comments:

[Terry] Semel has been an absentee CEO; he still lives in LA with his family, reportedly napping at the Four Seasons in SF when he's too tired to fly his jet back to LA during the week. This aloofness and distance, along with the presumption that he's been slowly moving all the "important" parts of Yahoo (read: the Hollywood ass-kissing parts) to Santa Monica, are among the morale issues that can be fairly laid at his feet.

Henry Blodget doesn't quite agree:

I should also say that I'm impressed with how Terry handled the whole Peanut Butter Manifesto thing.  No word yet on where Brad Garlinghouse will sit in the newly reorganized Yahoo, but Terry's calm refusal to address the memo publicly, combined with rapid actions that acknowledged much of what it said, strike me as supremely professional.

[Valleywag also has a wonderfully snarky list of all the Yahoo players]

Buffer overflow:

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And finally... The last thing you want to see on a ATM

Richi Jennings is an independent technology and marketing consultant, specializing in email, blogging, Linux, and computer security. A 20 year, cross-functional IT veteran, he is also an analyst at Ferris Research. Contact Richi at

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