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Bartz yanks Yahoo's tiller; will the battleship turn?

After a six-week crash course in Yahoo, Bartz is ready to start pushing the company in new directions, starting with management that reflects her priorities.

Stephen Shankland principal writer
Stephen Shankland has been a reporter at CNET since 1998 and writes about processors, digital photography, AI, quantum computing, computer science, materials science, supercomputers, drones, browsers, 3D printing, USB, and new computing technology in general. He has a soft spot in his heart for standards groups and I/O interfaces. His first big scoop was about radioactive cat poop.
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Stephen Shankland
3 min read

In the six weeks since Carol Bartz took over as Yahoo chief executive, she's interviewed employees and executives, learned the company's businesses, assessed what's good, diagnosed what's wrong, and now reorganized Yahoo management to set it on a new course.

Now comes the hard part.

Yahoo CEO Carol Bartz
Yahoo CEO Carol Bartz Yahoo

The assertive Bartz expects the new, simpler management structure to produce faster decisions and better accountability among executives. She also ousted Chief Financial Officer Blake Jorgensen, hired Elise Steele to the new chief marketing officer post, and set up a customer advocacy group to make sure Yahoo pays due attention to its users and advertisers.

Those are high-level actions, though. For them to have an effect, they'll have to trickle down to the rank and file who are responsible for everything from selling ads to revamping Yahoo Mail.

Reorg fatigue
And Yahoo has reorg fatigue. Compare the verbiage of Thursday's change with that of Yahoo's last big restructuring in June.

Here's Sue Decker, who agreed to step down as president when Bartz arrived, speaking last June: "The changes we're making today will help deliver superior global products for users and enable faster and better decision-making."

Now here's Bartz in her blog about the reorg: "For us working at Yahoo, it means everything gets simpler. We'll be able to make speedier decisions...and we have a renewed focus on the customer. For you using Yahoo every day, it will better enable us to deliver products that make you say, "Wow.'"

So clearly it takes more than words to address a company's issues.

Cleaner responsibility
The biggest part of the change is Bartz's effort to clean up the chain of command. Earlier, the company had aligned engineering and product groups that jointly worked on the same projects; now those are unified under Executive Vice President Ari Balogh.

With the move, Yahoo is "trying to kill the seemingly indestructible silos that have been a part of Yahoo since the beginning," said UBS analyst Benjamin Schachter in a research note.

However, there still is a joint ownership issue. Balogh oversees the vision and creation of Yahoo's products, but Hilary Schneider and an as-yet-unchosen executive are in charge of delivering them to the world--Schneider in North America and the other executive elsewhere.

If the hand-off is smooth and cooperative, that doesn't have to be a problem. And with one executive rather than three responsible for the world beyond North America, collaboration shouldn't be as complicated.

Neutral to Microsoft
By centralizing power, the reorg might make it a smidgen easier to carve off Yahoo's search and search-advertising business to Microsoft, a possibility that keeps resurfacing. But that's more likely a decision that would be made by Bartz and the board, so it's probably not wise to infer that such a deal is more or less likely after Thursday's change.

And note that Yahoo appears headed in the other direction, with tighter integration rather than isolation between search ads and display ads. For example, people's search queries can be used to help choose which display ads are shown in an attempt to target them at specific Yahoo users.

One thing is clear, though. There's no doubt Bartz is in command and is working to take the initiative.

Replacing the CFO, adding a CMO, and personally installing the other executives into their new posts was the first step to reshaping Yahoo the way Bartz wants. Now she'll be better able to push, prod, cajole, and coax the rest of the company along.