February 26, 2009, 2:47 PM — Yahoo's new CEO has implemented a management restructuring, as the company continues to struggle in a search market dominated by Google.
The restructuring looks positive and could solve a problem that critics said slowed down progress at Yahoo, one analyst said. "Yahoo was notorious for being very Byzantine," said Karsten Weide, an analyst at IDC. "They were more busy with the internal structure than with the outside world and that was a big problem. It made the decision process very slow."
Indeed, CEO Carol Bartz said the changes make the structure simpler and will let Yahoo make speedier decisions and focus better on customers.
The changes include combining the Tech and Product groups into a new group lead by Ari Balogh, who will be executive vice president and CTO. He'll report directly to Bartz and will be responsible for overseeing the vision, strategy and quality of all Yahoo products.
Previously, Yahoo had "a million different product groups, each responsible for one part of a product. ... That opened the door to political shenanigans, friction that slowed things down," Weide said.
He expects that creating one product group will offer Yahoo a single more streamlined way to deliver products to customers.
The company will also be divided into two regions. North America will be led by Hilary Schneider and an international head will be hired soon. They'll also report directly to Bartz.
In the past, Yahoo had a U.S. group and four international regions, Weide said. The new setup should reduce some splintering and help Yahoo to focus on international markets, where most of its future growth is likely to come, he said.
He also thinks that creating the two groups is a sign that Yahoo is less likely to sell off international assets. "They may still sell off some minor stuff but the major message here, and Bartz has said it before, is they aren't going to sell this stuff just to make some money," he said. "Her message seems to be to make this viable in the long run."
Other changes include the appointment of David Ko, who will report to Schneider and head the mobile business, strategy and monetization teams. In addition, all product teams will be responsible for mobilizing their products.
As head of Yahoo's Global Mobile Business, Ko will be taking over for Marco Boerries, head of Yahoo's Connected Life division, who announced his plans to leave the company this week. Boerries ran the company's mobile efforts.
Ko was a vice president in the Connected Life group and spent time running Yahoo's mobile efforts in Asia. His background could offer a hint at the direction of Yahoo's mobile strategy, Weide said. Asia often sets mobile trends, both from the more developed markets and from nations where many people will have their first Internet experiences from mobile phones, he noted.
Yahoo has also created a chief marketing officer role, which will be filled by Elisa Steele, a new hire. She'll be responsible for overseeing global marketing.
The company will also build a new Customer Advocacy group designed to listen to customers and incorporate their feedback into products. Yahoo still needs to hire someone to head that team.
Another new group will be Service Engineering and Operations, tasked with building common technology services and responsible for application management and infrastructure. David Dibble will run the group.
Yahoo also said that after a transition period, Chief Financial Officer Blake Jorgensen will leave the company. Yahoo has already begun looking for a replacement.
Weide has high hopes for the effects of the restructuring. "I think it's all very encouraging," he said. Combined with some of the technological developments started last year, Yahoo has a chance of gaining better traction, he said.
But not everyone was as positive. "Yahoo has been through a lot of reorganizations with the promise of improving decision making and streamlining the process," said Greg Sterling, an analyst with Sterling Market Intelligence. "It's one of those things that starts to sound like the boy who cried wolf. Although that's not to say this won't succeed."
The departures follow a recent Wall Street Journal blog post citing unnamed sources that described an impending major reorganization of the company's executive ranks.
In mid-January, Bartz replaced Jerry Yang who stepped down from his role as CEO in November under heavy criticism for his handling of a Microsoft acquisition offer and the collapse of a search partnership with Google. With the appointment of Bartz, President Sue Decker announced she'd leave the company after a transition period.
