Yahoo Slams Down The Hammer: Major Reorganization

By Nathan Weinberg

Yahoo announced last night that it was making some major moves, designed to combat the general feeling in the tech world and on Wall Street: that something just isn’t right about the direction of the company. The last six months or so, it seemed like Yahoo was slowly withering away, trending away from Google on revenues, market share, mind share, every single metric, and was destined to slowly fade from being a viable competitor.

Thus: the big news, that Yahoo is reorganizing. The two major points in the announcement:

  • Yahoo Chief Operating Officer Dan Rosensweig and Lloyd Braun (the so-called “Hollywood guy) are leaving
  • The company will be divided into three groups:
    • Audience group - designed to grow the success Yahoo already has, as a company with a ginormous number of pageviews, handling social media, mobile, international growth, and make Yahoo an even larger destination.
    • Advertiser & Publisher Group - will serve the advertiser community, bringing more value per ad dollar accross the company, probably hoping to make sure Yahoo does a better job monetizing all its inventory. Will be headed by current Chief Financial Officer Susan Decker (the search for a new CFO is underway).
    • Technology Group - designed to serve the other two, by doing the geek work necessary to get everything running, handling infrastructure, new platforms, and improving current ones.

CEO Terry Semel has a post on one of Yahoo’s blogs (but not the main one) saying that they are now entering the third phase of its life as a company. The first was “get big fast”, the second was “turn into a real company” and the third is “now that you are a real company, focus on growth and opportunities”. Since Semel came in to usher in the second phase, the real implication is that he should be leaving so they can start the third phase, and the fact that he is still there may mean that they are not willing to commit as much as they should for this initiative to succeed.

Om Malik seems stunned that they would announce this with absolutely no idea who was going to head up their audience group. He also notes that there are no specifics in the announcement, no announcement of which products will be killed off or merged, implying this is some sort of “philosophical” announcement, and not a balls-to-the-wall “action” announcement.

Valleywag had a number of posts breaking the news, even publishing a sort of obituary of Terry Semel’s career. If there’s any justice in this announcement, Semel will have to go eventually for this to be a real change of direction. It also appears their Chief Communication Officer is out, due to the poor public handling of this situation.

Jeremy Zawodny talks about “the prayer of Silicon Valley”:

And, as you might expect, the internal rumor mill was already in full swing.

At one point in the IM conversation, shortly after I suggested that Britney Spears should be our new CEO (since she’s so popular here anyway), I wrote the following:

    Maybe this will make wall street happy and our stock will rocket up before we all have to find new jobs…

Being a quick-witted one, he wrote back: that should be codified as the “Prayer of Silicon Valley”

Sounds good to me.

This reorganization is what is needed, yet I feel like they didn’t do enough. I hope Yahoo can rebound from its current malaise, but I’m not sure they’ve actually done what is necessary to accomplish it.

December 6, 2006 by Nathan Weinberg in:

3 Responses to “Yahoo Slams Down The Hammer: Major Reorganization”

  1. » Some Happier Yahoo News » InsideGoogle » part of the Blog News Channel Says:

    […] Not all is reorganizations and scramblings to save the company at Yahoo: they also released their top searches of 2006 yesterday (as usual, a month early, ridiculous). Tops of the year: Britney Spears, whose disaster of a personal life and lack-of-underwear made her #1 again, the fifth time in six years she’s the #1 celebrity, while Steve Irwin’s death was the biggest news story of the year. […]

  2. The Blogging Times » Yahoo is Chunky, Gooey Peanut Butter Says:

    […] Reuters Blogs, Scobleizer, IP Telephony, VoIP, Broadband, John Furrier, Bruce Clay, Inc. Blog, The Blogging Times, Susan Mernit’s Blog, TechEffect, John Battelle’s Searchblog, Tom Foremski: IMHO,Sadagopan’s weblog …,, Alec Saunders .LOG, Matt Cutts,, Scott Rosenberg’s Wordyard, Chuqui 3.0, CNET […]

  3. Nicki Dugan Says:

    Hey, Nathan: I’m editor of Yodel Anecdotal and just wanted to clarify your point about “the main [Yahoo! blog].” I assume you’re referring to Yahoo! Search Blog as our primary blog? While it essentially served as our corporate blog for two years, our Search Blog is actually focused on topics limited to all things Search. We launched Yodel Anecdotal as Yahoo!’s official company blog in August and we cover a wide variety of topics. Thought I’d clear that up.

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