Yahoo Reorg or Retread

18 Comments

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 announcing the departures of COO Dan Rosensweig and Lloyd Braun. (Terry Semel has a blog posting on the official Yahoo blog, which is a little more colorful.) The reorganization release is 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. Decker is responsible for the money makers. CTO Farzad Nazem is going to head up the technology group. Yahoo doesn’t want to call it a group!. so who are we to argue. ;-)

Apparently all these changes are going speed up the decision making process. The audience group is going to get a new chief!

Yahoo! has launched a search for an experienced executive to serve as head of this group.

What, not a single executive inside the company who is up to the task, or is Semel worried about infighting that might break out if one was preferred over the other. Hey, just thinking out loud here!

There is no clarity on which products/groups are going to be pruned, or merged. So it will be a while before we see the fog of bureaucracy that has enveloped Yahoo and turned it into a company that constantly second guesses itself. More than the reorg, what Yahoo needs is a serious bit of soul searching. In his longish statement Semel goes on to talk about what Yahoo will do and the future is going to be different and better.

The Internet is continuing to grow and evolve at a rapid pace, and we’re reshaping Yahoo! to be a leader in this transformation, just as we did successfully five years ago. Our strategy capitalizes on big emerging trends and leverages our core strengths in search, media, communities and communications.

A few days ago, Robert Young had noted that “If you strip away all the layers that make up Yahoo, what you’ll find is the Internet’s largest communications and community company.” I personally think of Yahoo as a consumer brand, not a technology company. Yahoo is a media company. It knows how to aggregate content pretty well, and it has the audience & has the ability to monetize it well.

And that it can offer communications tools is a bonus – and barrier to entry. Hopefully after the reorg, they realize this, and drop all the pretensions about competing over search with Google which says its mission is to organize the world’s information. Yahoo’s mission aggregating all the “relevant information.”

18 Comments

AnchorsAweigh

Yahoo has no vision of the future.

The Board and Semel need to do some hard-thinking. This is just the latest in a series of investor window-dressings. Those who manage money have read the writing long back.

Phoneranger

Come on Om. When was the last time you found a good three card monte game here in NYC? They’ve been gone since the last century. You want a more current analogy? Semel will fix Yahoo when Bush fixes the war. In fact they won’t so it will be up to the next guy (or gal).

Steve Morsa

Nice, bold moves from a great company, Terry and the Yahoo team.

If I may humbly suggest another:

The launch of a brand new ad platform where you’d enable your advertisers to quickly and easily select and bid on the actual demographic and psychographic traits and characteristics (keytraits) of their most desired customers; instead of just the words people enter into search boxes.

As explained in the white paper at MatchTo.com and detailed in it’s pending patent (#11/250,908), Match Engine Marketing (MEM)/paid match would, among other things, enable Yahoo to stop Google in its tracks (while taking 10%+ of their search share), further boost the use of your many other excellent products and services, and cut human-generated click fraud by 85%+; doing so w/in 24 months of the launch of MEM (i.e. Yahoo Match Marketing).

Like paid search did before it, paid match is itself going to turn the world of advertising upside down–again.

Yahoo should be at the helm when it does.

Ryan Griffin

Viewing the announcement through an agency lens, I wonder about construction of the (mandatory) bridge between the “Audience” group and the “Advertisers and Publishers” group.

In business terms, what will “great user experiences” deliver to Yahoo!, beyond more eyeballs — which the company obviously does not need? Without an innovative means of monetizing these experiences, one that is embraced by people (that is inclusive of consumers and advertisers, of course), there is no path that is truly forward…and hint, the solution will not be found in the disruptive tactics (read: banner ads) of our medium’s infancy.

Yahoo!’s general approach to the market and their “partners” aside, the above is the big issue from where I sit — and one that I would have liked to have seen formally addressed in a structural fashion.

That said, I applaud the destruction of the product groups/managers…whose lack of incentive to innovate has left advertisers in a consistent quandary for many years now.

Charlie

I think this speech was pulled right out of a Dilbert cartoon. They forgot “empower key motivators.”

I would have liked to see a list of actual initiatives or objectives… something we could really sink our teeth into.

dave mcclure

well, i agree it’s all about as clear as mud just now. maybe we’ll see more after january.

guess i understand the re-org around customer focus, but i’d still contend that improving Yahoo monetization on search & page views is the core challenge the company needs to address… sounds like that’s now Decker’s cross to bear, altho since she’s not a techie seems like Zod’s group will be responsible for making it happen.

at least it’s encouraging to see Semel blogging. i won’t hold my breath for the next post, but right now he’s ahead of Eric Schmidt on that count. would be great to see more Internet Giant CEOs blogging about where they plan to take the company. the vision thang, you know.

Rick

Question is whether this is preventive or reactive. Prevent buys time. React is toast.

From previous accounts, this is a desperate reaction.

Om Malik

I think you might be onto something. Still, the only real response that would matter is what “wall street” does. The stock movement will say if investors (and owners of the company) believe in this strategy or not.

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