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Thursday December 7, 1:15 AMYahoo reorganizes under pressure from Google
Under the new structure, Dan Rosensweig will step down as chief operating officer in March of next year and the company will be divided into three groups, one devoted to technology and two which will be "customer focused", Yahoo said. The moves appeared to be a response to declining financial performance and criticism the company has become too thinly spread, too focused on new products, and too bureaucratic. These observations were recently leveled at Yahoo management by a senior vice president of the Californian company, Brad Garlinghouse, in an internal memo leaked to the press in the United States. Garlinghouse called his memo the "Peanut Butter Manifesto", implying that the company's activities were spread too thinly, like peanut butter on toast. "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," said Yahoo chief executive Terry Semel in a release. The executive heading each of the new three groups will report directly the Yahoo chief under the new structure. "We plan to drive growth and profitability by leveraging our deep audience insights to create a full-fledged advertising network," he added. Chief financial officer Susan Decker will become the head of a newly created Advertising and Publisher Group intended to "lead the transformation of how advertisers connect with their target customers" on the Internet, Yahoo said. A search is on for someone to replace Decker, who has been chief financial officer at Yahoo since 2000. The firm, based in Sunnyvale, California, is also seeking someone to head a new Audience Group with the mission of creating "unique, tailored and engaging experiences" for Yahoo users. Chief technology officer Farzad Nazem will continue in his position but he will be in charge of a group with a mandate to speed innovation, particularly of advertising platforms that build on Yahoo's Project Panama network. Although Yahoo is a leading site on the Internet, its ability to convert user visits into revenue has been flagging in comparison to lucrative techniques employed by online search rival Google. Yahoo's stock price has suffered this year owing to the firm's failure to effectively "monetize" its online services and generate revenues sufficien to impress investors. For the third quarter, Yahoo reported a 37-percent slump in net profit to 159 million dollars compared to 254 million in the same period a year earlier. For the same period, Google announced it had almost doubled its net profits to 733 million dollars. "Our new structure gives us the opportunity to draw more fully on Yahoo's deep bench of talent while also increasing accountability, reducing bottlenecks and speeding decision-making," Semel said. "We're putting the right people in the right places to execute our focused growth strategy." Yahoo said it was moving aggressively to take advantage of growth opportunities on the Internet. Moves made by Yahoo during the past month included partnerships with more than 150 US newspapers to deliver content online and a mobile telephone advertising alliance with Vodafone. Yahoo decided to acquire the website Bix, which is devoted to online amateur talent contests. Yahoo also finally rolled out its new Panama Project search advertising platform. The management changes will take effect at the start of January and the restructuring would be completed by the time Rosensweig leaves at the end of the first fiscal quarter of the year, according to Yahoo. |
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