Yahoo unveils re-org, sort of

February 26, 2009

So Yahoo Chief Executive Carol Bartz finally unveiled on Thursday a much-anticipated management reorganization — well, kind of. She blogged about it in a post called “Getting our house in order” and she sent an internal email to employees. Another bunch of memos were also sent by various division heads, HR, etc.

But there was no official announcement for Wall Street analysts, investors or the press, except for an SEC filing announcing the departure of CFO Blake Jorgensen which didn’t mention the re-org at all. A Yahoo spokeswoman said there were no plans for a press release, calling the changes an internal matter. Hmmm.

Well, the moves were interesting enough for various analysts to weigh in. “We expect more significant restructurings and divestitures of various businesses will occur in the future as YHOO focuses on its core businesses. Also, while the timing is uncertain, we still believe a search deal with MSFT is likely,” wrote UBS’s Benjamin Schachter. He also notes that Yahoo has told him “unequivocally” that Jorgensen’s departure had nothing to do with the CFO’s comments yesterday on Yahoo being willing to sell search, which helped push Yahoo shares up 7 pct earlier.

If you’re still hankering for more details, here’s Bartz’s email to employees:

Yahoos,

As I’ve gotten to know Yahoo! over the past several weeks, I’ve developed a point of view on how our organization should be structured to set us up for success.

Our goal is simple: to consistently deliver awesome consumer and advertiser experiences, everywhere in the world we do business. Delivering great customer experiences is everyone’s job at Yahoo! – and each part of our organization will have a clear role in making that happen every day.

The timing of this announcement is important. As soon as decisions were made, I wanted you to know about them — even if that means we don’t have all the details nailed down yet. Yes, there’s been a lot of speculation in the media over the past few days … that’s been a little frustrating, but I’m not willing to speak publicly about decisions before they’re final. Today, they are — so I’ll lay out our new organizational structure for you now.

I know you guys have reorg fatigue. Hang in there – our intention is to leave this structure in place for two to four years. We’ll continue to make adjustments as needed, but we expect this core structure to stay put.

The structure outlined below will enable us to make big improvements in our product quality and operational efficiency. Part of that is simplicity – I’m frankly amazed at how complicated some things are here! We’ll have much clearer decision making and accountability. Product and regional teams will share responsibility for revenue targets and expense management, but we’ll have one P&L, for which I’m accountable.

We will also be in a better position to really listen to and understand our customers -both consumers and advertisers. I think we’ve gotten into the habit of focusing internally too much and we sometimes forget who we’re here to serve. You’ll notice that our management structure puts a renewed focus on the customer, with stronger feedback loops across the company… and they all come through me.

Also, as you know, no organizational structure is a substitute for collaboration, communication and trust. We’ll all need to evolve our behavior a bit – as teams and as individuals – to make this structure work the way it’s designed.

So here’s the overview, with the roles that will report directly to me. As you’ll see, some of our leaders are still to be determined. I know you’ll want more detail than what’s below – you can learn more on Backyard: http://backyard.yahoo.com/ourorg.

Products: We’ve combined Tech and Product groups under one roof, led by Ari Balogh as EVP Products & CTO. Ari’s charter is to deliver global products that enable extraordinary consumer and advertiser experiences. Ari’s direct reports now include one leader for each product group – we’ve taken care of the “two in a box” problem.

One important note: The Connected Life team has been integrated into various parts of the new organization. Our mobile strategy remains a key part of Yahoo!’s focus going forward and all of our product groups will own mobile innovations. After leading Connected Life for four years, Marco Boerries has resigned from the company to spend more time with his family in Europe. We thank Marco for his important contributions at Yahoo!.

Regions: There are now two: North America and International. As I’ve said before, international growth is critical for Yahoo!, which has become too reliant on its U.S. business over the years.

The regions deliver Yahoo!’s products, programming and services to consumers, partners and advertisers in local markets. They will partner closely with the newly formed Regional Solutions & Products group in Ari’s organization to help drive a significant shift in how Yahoo! develops products for different geographies. The goal is to have global platforms on which regional product offerings are based.

The North American region — comprised of the U.S. and Canada – is led by Hilary Schneider. The leader of our International region, to be hired soon, will be responsible for a cohesive Yahoo! global strategy and seizing our international growth opportunities. Until we determine who’ll lead the International region, Rose Tsou (Asia), Rich Riley (Europe) and Keith Nilsson (Emerging Markets) will continue to report to me.

Marketing: Elisa Steele will be joining Yahoo! as our Chief Marketing Officer (CMO), effective March 23. Elisa joins us from NetApp where she was SVP, Corporate Marketing. Previous to NetApp, she held executive positions in marketing at Sun Microsystems. Elisa will oversee our global marketing strategy and provide direction for our marketing function. She’ll bring together the various Yahoo! marketing teams that have been spread across the company. Reporting into Elisa will be Brand Marketing, Audience Marketing, Corporate Communications, Insights, Policy & Privacy, Community Affairs and related central teams. I’m delighted to have Elisa joining the team.

Customer Advocacy: As I said, we can do much better in hearing the voice of the customer across Yahoo!, and incorporating what we hear into all of our work day-to-day. We have opened a search for a leader, who will oversee Customer Care and Ad Operations globally with the goal of improving how we support Yahoo!’s users and advertisers. In the interim, these teams will continue to report to Hilary.

Service Engineering & Operations: This new team is responsible for delivering common technology services at scale, including application management and infrastructure. No matter how cool our products are, the customer’s experience won’t be great unless our applications consistently deliver. Note that we’re bringing Service Engineering together as one group because these engineers bring expertise that is best applied horizontally. Leading this organization is David Dibble, who joined Yahoo! in December. David’s team also will be accountable for delivering more effective corporate IT systems.

Corporate Functions: Blake Jorgensen will be leaving Yahoo! and I am searching for a new CFO. Blake will remain through a transition with his successor, and I want to thank Blake for all of his great contributions to Yahoo! over the past two years. Mike Callahan will continue to lead our Legal team, and David Windley leads our Human Resources function. Joel Jones joins the team as my Chief of Staff.

So that’s the high-level view. These changes are effective immediately, but we’ve got more work to do in filling out the structure of each group. In the short term, this transition will be challenging for many of our people. My executive staff will be working with their organizations as quickly as possible to create further clarity. For example, we’ll need to recast budgets and adjust work areas so we have the right people working side-by-side.

I want to thank all of you who’ve shared your ideas and views with me since I arrived. Several leaders across Yahoo! came together to design this new structure – I’ve been very impressed with their dedication to the right outcomes, particularly how they’ve embraced the need to eliminate the silos that have been a drag on this organization for so long.

I think this organizational structure has the potential to solve many of the issues you’ve helped me better understand. Of course, new issues will emerge. But I know we’ll be aligned and nimble in tackling them together.

This is a tremendous, proud company with a powerful brand, great products and a bright future. Now’s the time to get more focused than ever on delighting our users and advertisers. Let’s show them how great Yahoo! can be.

Carol

(Photo: Reuters)

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[...] Bartz has also made a number of staff changes. Chief financial officer Blake Jorgensen has resigned and Yahoo is looking for a new one. Marco Boerries, boss of Yahoo Connected Life, has resigned “to spend more time with his family”: the guts of the division will become Yahoo Mobile, run by David Ko. Elisa Steele, from NetApp Inc, will join Yahoo as chief marketing officer. There have been other changes, not officially announced, but detailed in Bartz’s memo to staff, which has been published by Reuters in Yahoo unveils re-org, sort of. [...]

[...] Bartz has also made a number of staff changes. Chief financial officer Blake Jorgensen has resigned and Yahoo is looking for a new one. Marco Boerries, boss of Yahoo Connected Life, has resigned “to spend more time with his family”: the guts of the division will become Yahoo Mobile, run by David Ko. Elisa Steele, from NetApp Inc, will join Yahoo as chief marketing officer. There have been other changes, not officially announced, but detailed in Bartz’s memo to staff, which has been published by Reuters in Yahoo unveils re-org, sort of. [...]

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