Saturday, December 09, 2006

Yahoo Reorg

This post would have went up on Tuesday when the news broke, but I figured I'd hold off to try to make sense of what happened so that I could write something coherent. Plus, I wanted to leave that last post on top of the blog for a bit, as it was, for some reason, garnering a little media attention.

(By the way, note on that last post: I got myself out of bed with the flu to see those presentations, and, needless to say, I was a little disappointed with their quality. The piece may have reflected some of the ire I felt at the time, resulting in harsher than intended language. Finally, between VentureVoice picking up my post and it, like all my posts, being plastered on the home page of the Wharton Entrepreneurial Programs website, there's almost no way my professor didn't read my rant. If you're reading this, Professor, I didn't so much think the problem was you, but rather the structure and content of the class. You obviously have a wide knowledge base, and you could really spice up the content by getting away from the textbook. That said, I understand if you fail me. I probably deserve it.:)

On to Yahoo! So what happened? The long-awaited reorg, of course, a celebrated Valley tradition. Much like Apple employees used to jest back in the day, Yahoo workers joke that having an awful boss isn't a big deal - in 3 months, you'll have a new one.

Ok, down to specifics. This reorg dwarfs those in recent history. Yahoo established 3 divisions - Audience, Advertiser & Publisher, and Technology - to refocus their efforts. COO Dan Rosensweig will be resigning in March. CFO Sue Decker will be running the Advertising Group and CTO Zod Nazem the Tech group, while the Audience group head will be found in the coming weeks and months. Topix has a nice AP article here if you're more interested in the nitty giritty.

My thoughts are basically... what? The typical Silicon Valley reorg involves a lot more heads rolling. Only Rosensweig is leaving, and by most reports only because he didn't want to play second fiddle to Sue Decker. And CEO Terry Semel said no layoffs are planned. I'm confused as to actually what the reorg is, then. It doesn't seem like much has changed. Maybe the company is more focused internally, but Yahoo hasn't gotten lean and mean to address their many problems. The coming months will tell what, if anything, has changed.

But what should Yahoo do differently? This covers only a small part of their business, but Robert Young voiced an interesting opinion on GigaOm - that Yahoo should start a Facebook clone. I've been thinking someone should do this for a while, and Yahoo would be a good fit. The Facebook clone would be closed (like the old Facebook), addressing the ire of being in an open social network that some students are feeling (though this sentiment has declined). Basically, a Facebook clone aimed at high school and college kids with a few perks (video uploading, for example, and possibly some smart classified functionality) has a good chance of seriously challenging Facebook.

Yahoo would probably want to build a separate brand but link it to the Yahoo name (to encourage visibility). Lastly, Yahoo is in a good position to launch it, as they have vast resources to design and ship the social network cheaply and efficiently. Anyone have some other good ideas to save Yahoo?

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