Yahoo Reorg or Retread

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.”

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