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API Journal: Article

OK, So Here’s the Plan: Yahoo’s CEO

The company is supposed to be reorganizing around customers and starting May 1 it will be divided into three operating groups

Yahoo's still wet-behind-the-ears CEO Scott Thompson, who just laid off 2,000 Yahoos to save $375 million a year, has laid out the gist of the expected reorg he has in mind for the joint, and naturally his internal memo escaped into the wild.

Whether there's a redemptive strategy in it to stop Yahoo's revenues from being chipped away by Facebook and Google rather than just an exercise in moving the deck chairs around on the Titanic isn't clear.

In the memo Thompson confirmed what is already widely known: Yahoo's Chief Product Officer Blake Irving is leaving and taking the centralized products group with him.

The company is supposed to be reorganizing around customers and starting May 1 it will be divided into three operating groups - Consumer, Regions and Technology - "charged with delivering the best customer experiences."

The Consumer group will also be divided into three units - Media, Connections and Commerce - and they're supposed to "redouble" the company's focus on what has now been determined to be its core business: its "owned and operated (O&O) consumer properties," which are supposed to be Yahoo's competitive advantage.

"To be very clear," Thompson wrote, "our highest priority is winning in our core business, and that will earn us the right to pursue new growth opportunities."

Media's the darling and includes Homepage, News, Finance, Sports and Entertainment.

The memo promises dedicated product engineering resources, top design talent and "differentiated technology" will be brought in to support the Consumer group.

Connections includes consumer businesses like search, communications and social properties such as Mail, Messenger, Flickr and Answers. It's supposed to "fundamentally re-imagine" how Yahoo designs and delivers the next generation of this "foundational" Yahoo widgetry.

Finally, Commerce, which currently lacks a leader, is supposed to "build on Yahoo's massive reach and strong consumer relationships, but their charter will go beyond traditional e-commerce." It's supposed to drive higher ROI for advertisers and agencies. It'll include Autos, Shopping, Travel, Jobs, Personals and Real Estate, which currently bring in about a billion dollars a year.

Regions are all about advertising and are supposed deliver the revenue and work with the Consumer group. It's supposed to drive "higher ROI for advertisers and agencies that reach users on Yahoo by closing the loop for them between user interests, advertiser spend, consumer intent and purchase behavior." The Wall Street Journal interprets this as meaning Yahoo will help them sell more product. How is the question.

Technology has been divided into Core Platforms under Mark Morrissey and Central Technology under David Dibble.

Core Platforms, which includes Yahoo Labs, user data and analytics, is, among other things, supposed to "leverage Yahoo's vast data stores to enable deep personalization and optimized monetization."

Central Technology includes Yahoo's data center, service engineering and cloud infrastructure.

Thompson says the company needs "more than scalable technology" to cozy up to the consumer. "This is among the most important changes we're making: we must bring some of our best product designers and engineers much, much closer to consumer needs and demands. Many of our top engineers will continue building on our foundation platforms and technology to continue to drive speed and scale. But to ensure we really know and can serve our customers, we'll also deploy top design and engineering talent into our Consumer business units, directly supporting our users' favorite Yahoo products to ensure we move much faster."

Finance, Legal and HR aren't changing.

The company's looking for a chief marketing officer and has made Penny Baldwin responsible for corporate marketing and communications in the meantime.

There's a new Transformation team in charge of the implementation of the restructuring and organizational changes. Evidently they're the cops.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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