Want CNET to notify you of price drops and the latest stories?

Yahoo launches reorganization

CEO Scott Thompson tells employees in a memo: "It's time for Yahoo to move forward, and fast." And the changes will be all about the customer.

Don Reisinger
Former CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
Don Reisinger
3 min read

Yahoo is commencing its long-anticipated reorganization, per a memo this morning from CEO Scott Thompson.

Effective May 1, Yahoo will operate in three groups -- consumer, regions, and technology -- all supported by Yahoo's established corporate teams, the memo says. Thompson said the move is designed to organize Yahoo's activities around its customers, not its employees.

"It's time for Yahoo to move forward, and fast," Thompson reportedly wrote to employees, a copy of which CNET has seen. "And as we do, I want every one of us to keep one thing top of mind: what we do is about our customers, not about us. For Yahoo to win in our core business, every one of us must put our customers first."

The word of the reorganization was first reported by All Things Digital's Kara Swisher, who posted Thompson's memo to employees.

Yahoo's reorganization comes just days after Thompson announced that his company would be forced to lay off 2,000 employees. The layoffs, the CEO said, would help Yahoo realize approximately $375 million in annualized savings and ultimately help the company achieve its new goals.

"Today's actions are an important next step toward a bold, new Yahoo -- smaller, nimbler, more profitable, and better equipped to innovate as fast as our customers and our industry require," Thompson said in a statement last week. "We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose -- putting our users and advertisers first -- and we are moving aggressively to achieve that goal."

Yahoo's new consumer division will be made up of three units -- media, connections, and commerce -- and focus on providing users "uniquely relevant and personalized content and services." Yahoo plans to double down on its news, finance, and sports offerings, among others, and focus efforts on both breaking news and holding so-called "tent pole" events for users to join in on. Yahoo's connections unit will focus on improving Mail, Messenger, and Flickr, among others, while the commerce aspect of its consumer group will be charged with "driving higher ROI for advertisers and agencies."

Yahoo's regions function will separate out the company's divisions across the world, so they can focus on advertising in their respective areas. The company's technology group will be charged with improving core platforms and developing new products the company can leverage. The regions will be accountable for all Yahoo revenue, the memo says.

The technology teams, meanwhile will handle the infrastructure, technology, and science efforts that support the consumer and regions groups.

Reorganizations are nothing new to Yahoo. In 2009, less than two months after former CEO Carol Bartz was appointed to her position, she also reorganized the company, announcing it in a blog post on its Web site. That reorganization, which separated out Yahoo's key functions, was designed to do much of what Thompson is trying to achieve with his own change.

"For us working at Yahoo, it means everything gets simpler. We'll be able to make speedier decisions, the notorious silos are gone, and we have a renewed focus on the customer," Bartz said at the time. "For you using Yahoo every day, it will better enable us to deliver products that make you say, 'Wow.'"

But Bartz's plan never materialized in the way she expected. And last year, she was fired. Now it's Thompson's turn to try something to fix Yahoo, but whether his reorganization will succeed where Bartz's failed remains to be seen.

Yahoo has yet to make an official statement on its reported reorganization. The company has also not immediately responded to CNET's request for comment. Yahoo shares are down 4 cents to $15.06 following news of the reorganization.

This story has been updated several times throughout the morning.