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Summary:

Last week, new Yahoo CEO Scott Thompson cut 14 percent of his workforce. This week, he explains how those who are left fit into his plans to reshape the company.

Scott Thompson
photo: PayPal

I was right — and I was wrong — about the newest version of Yahoo. A week after he laid off 14 percent of the staff, new CEO Scott Thompson is shifting to an operations approach, sort of, but he’s also keeping the regions structure for sales and a separate tech operation. The diagram probably looks very neat; the reality could be anything but.

The announcement also marks an official end to Blake Irving’s run as chief product officer.

From the memo, posted by Kara, preceding an all-hands meeting:

Effective May 1, Yahoo! will operate in three groups — Consumer, Regions and Technology — all supported by our established Corporate teams. Each of the three groups will be charged with delivering the best customer experiences and have very clear accountability for getting results.

Our new Consumer group will be all about creating great, engaging user experiences. Our geographic Regions will serve our advertisers and agencies and be accountable for all Yahoo! revenue. Our Technology teams will provide the advanced infrastructure, technology and science to enable our Consumer group and the Regions to deliver our best products and experiences into market, at scale, and fast.

Here’s how it shakes out for now:

Consumers:

– Media is being split from sales. Ross Levinsohn will run the media properties globally, including the Homepage, News, Finance, Sports, and Entertainment but the revenue will be divvied up by region, with exiting EMEA head Rich Riley getting the Americas job and control over sales.

– Commerce, expected to be a major part of the PayPal alum’s plans and claims of a growth strategy, gets its own group. No business head yet but it will focus on connecting the data dots and getting the most money out of them via advertising or transactions in Autos, Shopping, Travel, Jobs, Personals and Real Estate.

– Communications (the group just blown up at AOL will be headed by Shashi Seth, and includes search, communications and social — Mail, Messenger, Flickr, Answers, etc. (yes, search is now a subset of a subset at Yahoo.) The charge here is to “fundamentally” reimagine how all of these connect to each other and the user.

Regions: This is all about ad revenue. Sales will be split by region, as is currently the case, with Riley heading the Americas from New York, Rose Tsou keeping APAC and regional sales head Christophe Parcot as interim lead for EMEA while they search for Riley’s successor.

Tech: Mark Morrissey will lead Core Platforms, with an emphasis on using the platforms and network “to enable great customer products and leverage Yahoo!’s vast data stores to enable deep personalization and optimized monetization.” David Dibble continues with Central Technology (data centers, cloud, etc.)

Between the 2,000-plus job cuts, the cuts and hires yet to come, and a reorganization that cuts across every part of the company even though some of it is staying intact, it’s hard to see Yahoo doing anything but managing change for months at least and we are probably quarters away from seeing anything but the impact of the costs. Yahoo already has said it will take a charge of $100-million plus for this quarter.

Maybe Tim Armstrong can get a fee for brokering a patent deal.

  1. Its not all about functionabitliy. Its also about what people think of the website as a whole. Personally I’m starting to hate yahoo because of the stupid articles with really bad, narrow-minded, biased writers.

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    1. Staci D. Kramer Tuesday, April 10, 2012

      But it’s also many websites. Depending on your access point, especially with personalization, you might come in to a place that works for you.

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  2. My bias on this one is that in an age when Apple’s secret to success has been to move AWAY from the silo’d business unit mentality (and towards integrated outcomes with clear user narratives), and Yahoo’s greatest struggles have historically been a by-product of failing to align business unit-driven “point products” around a unified vision + strategy, it seems that the best thing that the new CEO could have done would have been to abandon the business unit structure, and embrace a “One Company, One Story” strategy. Alas.

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  3. When Yahoo created individual business units around 2000 it created chaos. A relatively cooperative environment immediately became political and fragmented. There was no glue to keep the best interests of the company ahead of the business units. Apple got it right. Google got it right.

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