Yahoo reorg centralizes power

Company says a reorganization into three main teams will improve products and speed decision-making. Jerry Yang and Sue Decker are still are in charge.

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Stephen Shankland
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Update 1 p.m. PDT: I added further details about the new organization.

Yahoo, under intense pressure, reorganized its upper management Thursday in a plan designed to improve its products, underlying technology, and operational execution, the company said.

Ash Patel will now report to Yahoo President Susan Decker. Stephen Shankland/CNET News.com

The new structure leaves Chief Executive Jerry Yang and President Susan Decker at the top of the org chart. As expected, Ash Patel and Hilary Schneider will report to Decker, with Patel leading a new audience products division, and Schneider in charge of go-to-market operations for the United States region.

In addition, a third, as-yet-undetermined executive will report to Decker. That executive will run an "insights strategy team," with responsibilities for centralizing and running a Yahoo-wide strategy regarding use of data and analysis. The new executive will be named in coming weeks, Yahoo said Thursday.

The company also is forming some new groups within its technology organization. One, the audience technology group, will be led by Venkat Panchapakesan. Another group, whose leader is yet to be announced, will focus on cloud computing and data infrastructure.

Yahoo underwent an executive exodus in the last two weeks, losing three executive vice presidents, two senior vice presidents, and others. It's not clear to what extent those departures were the cause or the result of the reorganization plan, but Decker indicated in a statement that the reorganization has been under way for months.

"The changes we're making today will help deliver superior global products for users and enable faster and better decision-making," Decker said in a statement. "This is a logical next step in light of our success last year in moving to a more centralized approach to developing world-class marketing products.

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"We have planned these changes deliberately over the past several months to clarify responsibilities and to capitalize on the scale advantages while allowing for fine-tuning to meet local market needs," Decker said.

Apparently at least some of the executive changes were involuntary.

"Some of the attrition we had was voluntary, and others were decisions we made because we wanted to take the company in a new direction with leadership," said Scott Dietzen in an interview. He joined Yahoo through its 2007 acquisition of online e-mail provider Zimbra and now also runs Yahoo Mail and Yahoo Messenger.

Yahoo has been suffering punishing pressure. In addition to steady business pressure from Google, it's been trying to fend off an unwelcome Microsoft takeover attempt, hammer out a narrower Microsoft partnership, fight a proxy battle with investor Carl Icahn, and begin a deal under which rival Google will supply Yahoo with search ads.

So it's no surprise there's major change. In fact, it's a safe bet there will be more major changes soon.

In the new order, Patel will oversee several consumer products available worldwide. Among those reporting directly to him is Dietzen, who now also runs Yahoo Mail and Yahoo Messenger. Another is Tapan Bhat, who ran Yahoo properties including Buzz, My Yahoo, and the main Yahoo.com page, and who under the new structure also runs Flickr and Yahoo Groups.

Patel's new area previously had been run by Jeff Weiner, who left Yahoo for a stint supporting venture capitalist work. Brad Garlinghouse, who's leaving this summer, had run the new work moving to Dietzen and Bhat.

Hilary Schneider
Hilary Schneider Stephen Shankland/CNET News.com

Schneider and her peers will have the profit-and-loss responsibilities, though.

Yahoo already had executives in charge of other regions: Toby Coppel for Europe, Rose Tsou for Asia, and Keith Nilsson for emerging markets. They and Schneider are in charge of signing up advertisers, cutting business deals, and working with Yahoo partners.

Meanwhile, Chief Technology Officer Ari Balogh, who still reports to Yang, is in charge of building and running Yahoo's computing infrastructure.

Balogh's audience technology group supports Patel's consumer products, with tight ties to corresponding product managers within Patel's group. And his cloud computing group initially will focus on providing internal services to the company--though that could change over time, he said in an interview.

"The primary focus is internal. But much like Amazon and Google, when you have something at scale and integrated, there are opportunities to offer services," Balogh said. "Based on some innovations, we may be able to leapfrog."

Reporting to Balogh in the search domain are David Ku, leading the advertising technology group; Prabhakar Raghavan, leading search strategy; and Tuoc Luong, leading search products on an interim basis, Yahoo said.