The long-anticipated Yahoo reorgVia a 1500+ word press release and a long post by CEO Terry Semel on Yahoo's Yodel blog, Yahoo announced the much anticipated and very significant management reorg and restructure. And the Oscar for longest press release title goes to:
Yahoo! Re-Aligns Organization to More Effectively Focus on Key Customer Segments and Capture Future Growth Opportunities.
The business will be divided into three groups: the audience group (aka: create advertising opportunities), the advertiser publisher group (aka: show me the money), and a technical group (aka: power the engine and tie together loose ends).
Wall Street's reaction was tepid (stock down 2% yesterday), but many analysts and commentators, like Forrester's
Charline Li, like what they see:
The press release contained a coherent mission statement for Yahoo! -- "to connect people to their passions, their communities, and the world's knowledge." I really like this because it puts "people" at the center of Yahoo!'s strategy. Compare this to Google's mission "to organize the world's information" and you get an idea of how each company's battle plan.
1) Audience Group, focused on audience building. Note that this is not about content creation, but instead, "focused on building the largest and most valuable audiences and relationships on and off the Yahoo! network". Kudos to Yahoo! for understanding that this is not about creating more and more content destinations a la Yahoo! Food, but creating new experiences, especially with social media.
I think this is the one that will make or break Yahoo!'s strategy. In the end, the race is not to be the best search engine technology-wise, or to have the most advertisers. It's about being relevant to your audience, no matter where they go or what they do.
2) Advertisers Publishers Group. In what is being seen as a CEO-grooming move, current Yahoo! CFO Susan Decker will be shifting over to the revenue generating side of the business.
3) Technology Group. This group centralizes technology development under CTO Farzad Nazem. This means that core platform infrastructure -- like social media, search, communication, and very importantly, profile/identity management will be under one unified roof. In the past, there appeared to be individual product teams developing these core technologies in isolation of each other.
Om Malik thinks there is much more than a reorg needed:
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.
Like Li and others, Om hopes that Yahoo will give up the fight with Google over building the best search engine:
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.”
I'm still not convinced that this is the best advice for Yahoo.
The battle for supremacy in search has just begun, and whilst Google is certainly king of the hill today, there are still big mountains to climb before one company should be declared the outright winner. Given how well Yahoo Answers is doing and the subsequent fold of Google's similar product, I think they'd be foolish to give up at this time. To Om's point, social search is all about delivering more "relevant information.
To say there is a bit of buzz about there would be an understatement:
Mercury News,
Paul Kedrosky's …,
PaidContent,
Screenwerk,
Mark Evans,
HipMojo.com,
Seeking Alpha,
Matt Cutts Guardian Unlimited,
PaidContent,
Silicon Valley Watcher,
Tech Beat,
Valleywag,
Tom Foremski: IMHO amongst others.
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