Yahoo Announces Major Reorganization

  |  December 6, 2006   |  Comments

The search and media giant tries to get nimbler by aligning its business into three operating groups.

Yahoo announced a sweeping reorganization Tuesday night, creating three operating groups and shuffling top execs.

As of January 1, the company will realign its operations into two customer-facing groups, one for audiences, and one for advertisers and publishers. A third operating group will focus on technology. The advertiser and publisher group will be led by Susan Decker, who has served as Yahoo's CFO since 2000, while Chief Technology Officer Farzad Nazem will continue to lead the technology group. A search is underway for an exec to lead the audience group, as well as a CFO to take over for Decker. The three group leaders will report directly to chairman and CEO Terry Semel.

"We're moving aggressively to deliver the most possible value to our key customers -- audiences, advertisers and publishers -- and seize the major new opportunities we see ahead for the Internet," Semel said in a statement.

Dan Rosensweig, Yahoo's chief operating officer, has decided to leave the company at the end of March. Rosensweig and Decker were widely considered the top two internal choices for a future successor to Semel. He was one of the first hires Semel made when he was named CEO in 2001.

Lloyd Braun, head of Yahoo's media group, will also leave the company. Braun was brought in two years ago to work his TV magic on Yahoo, taking advantage of his entertainment industry connections to develop new online content deals. That dream was never realized.

No successor was named for Braun. The most likely, David Katz, left the media group last week.

The reorganization is intended to make Yahoo a nimbler media company, according to Semel. He said the new structure would increase accountability, reduce bottlenecks and speed decision-making. "We believe having a more customer-focused organization, supported by robust technology, will speed the development of leading-edge experiences for our most valuable audience segments," Semel said.

The audience group will focus on building Yahoo's audience on and off its network, and creating more engaging experiences for users. It includes products in search, media, communities and communications; and social media.

The advertiser and publisher group will be created by combining Yahoo's marketing and sales teams, as well as its distribution partners. The formation of a single global ad network is intended to create more value for advertisers and publishers and increase Yahoo's monetization capabilities.

Decker, who has served as CFO since 2000, has also been an important contributor to the company's business strategy. Besides managing Yahoo's financial and administrative direction, she was recently tapped to oversee the Yahoo Marketplaces business unit, which she will continue to direct as part of the advertiser and publisher group.

The technology group will increase its integration within product teams, with a mandate to speed the development of innovative, next generation advertising platforms beyond Project Panama to support the expansion of Yahoo's global advertising network.

Each of the three groups will be asked to work toward four key objectives. The first is to expand Yahoo's customer-centric culture and capabilities, organizing its services around audience segments and advertising customers, rather than around products. The second objective is to focus on social media environments. A third goal is to extend the breadth of its advertising offerings to meet the needs of advertisers of all sizes and needs. The final objective is to drive organizational effectiveness.

"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," Semel said.

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Kevin Newcomb

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.

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