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Yahoo Restructures To Jump-start Growth

April 11, 2012

Yahoo CEO Scott Thompson unveiled a highly anticipated reorganization plan on Tuesday, saying the company would restructure into three main divisions to sharpen its focus on users, advertisers and technology.

The announcement comes just one week after Yahoo said it would lay off 2,000 people, or 14 percent of its workforce — a move that set the current reorganization in motion.

Thompson unveiled the new plan, which will take effect May 1, during an “all hands” meeting for Yahoo´s employees at the company´s Sunnyvale, CA headquarters.

“It´s time for Yahoo to move forward, and fast,” Thompson said in a memo distributed to employees and obtained by The Associated Press (AP).

“To be very clear, our highest priority is winning in our core business, and that will earn us the right to pursue new growth opportunities,” Thompson wrote.

Under the new plan, Yahoo will consolidate its consumer products into a single division, called Consumer, which will run Yahoo’s news sites, home pages, search and email functions.  The division will also oversee e-commerce and Yahoo´s shopping, automobile, travel and job listings.

Among the executives in that division will be Ross Levinsohn, a former Fox Interactive executive who will oversee Yahoo’s home pages and other media content, and Shashi Seth, who had been running Yahoo search and will now oversee search and social media functions.

The Consumer division will also gain a product development team, including designers and engineers.

The restructuring removes some of Yahoo´s formerly centralized division responsible for product development.

In his memo, Thompson confirmed that Chief Product Officer Blake Irving would be leaving the company, but will work with Yahoo executives to ensure a smooth transition in the weeks ahead.

The restructuring also creates a second division, called Regions, which will work with advertisers in the major geographic regions of the world.

Rich Riley, who currently runs Yahoo´s operations in Europe, the Middle East and Africa (EMEA), will be in charge of the Americas, while Asia-Pacific operations will continue to be run by Rose Tsou.

Christophe Parcot will serve as acting chief of EMEA while the company works to find a permanent head of that area.   Parcot currently runs sales for EMEA.

A third division, called Technology, will oversee Yahoo´s core technology and data centers and “Yahoo’s vast data stores” to generate more personalized content and advertising, Thompson said.

Mark Morrissey will be in charge of the division, while David Dibble will run central technology, including Yahoo´s data centers.

Thompson has been under pressure from critics, including some investors, who faulted him for announcing layoffs before unveiling any future plans for the company.   However, Thompson said he delayed announcing the reorganization out of respect for the employees slated to lose their jobs.

“Over the last 60 days, we´ve fundamentally rethought every part of our business,” Thompson wrote in the memo.

“We will continue to actively consider all options that allow Yahoo to put maximum effort where we can succeed.”

“There´s a lot to do and that´s why I can´t stress enough that we all need to focus on getting stuff done.”

“Getting stuff done is short hand for eliminating bureaucracy and barriers so we can all innovate as fast as our customers and the industry require. That´s pretty fast.”

Shares of Yahoo´s stock fell 11 cents on Tuesday, closing at $14.99.


Source: RedOrbit Staff & Wire Reports



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