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The reshuffle divides the company into three groups: an advertiser and publisher group; an audience group; and a technology group. It's also resulted in the departure of Chief Operating Officer Dan Rosensweig and Yahoo Media Group chief Lloyd Braun. Chief Financial Officer Sue Decker will lead the advertiser and publisher group.
The idea is that the reshuffle will jumpstart a slowing ad-revenue growth rate and a reversal of its lagging stock price -- but that remains to be seen.
The importance of Ms. Decker's move from the CFO role to lead the advertiser group, responsible for almost all of Yahoo's revenue, is lost on few. Yahoo insiders and watchers of the company say she is gunning to be Yahoo Chairman-CEO Terry Semel's replacement at CEO -- and her new role is clearly grooming her for the job, especially because her chief rival to the top job, Mr. Rosensweig, is leaving the company.
Ed Montes, MediaContacts exec VP-managing director, U.S. operations, and a former Yahoo-er, said he thinks Sue Decker to lead advertising is a "great choice."
Relationship with Wall Street
"Sue's relationship with Wall Street is impeccable and the Street loves her," he said, although the changing of the guard at the top won't necessarily affect advertisers from a relationship day-to-day standpoint. One thing that worries him: What gets done in the meantime, the month until the new management assumes its roles.
"You either get away with doing a lot of deals or you get nothing done because everyone's afraid to make the decisions," said Mr. Montes.
Less surprising is Mr. Braun's departure. The media chief had been flying under the radar for the past year, after he -- and Yahoo -- were highly criticized for spending too much to fill Yahoo with original content, or trying to bring a TV development model to the web. Yahoo's content strategy of late is a combination of licensed plus user-generated programming, with smaller doses of more efficiently produced original content as the "salt and pepper on the meal," to use a Braun term.
The moves also come as Yahoo has been criticized both internally and externally as lacking focus and leadership and, perhaps, spreading itself too thin as charged in the now-infamous "peanut butter" memo from Senior VP Brad Garlinghouse (the internal memo criticized the lack of focus at the company, comparing Yahoo's efforts across all its properties to peanut butter spread too thin). The company has lost search share to Google and lowered ad revenue expectations citing marketplace softness. And some analysts criticize that it has too many overlapping products that it hasn't properly integrated.
'Smart business move'
"It's a smart business move," said Patrick Benson, senior VP-director of digital marketing, DeutschMedia. He said Yahoo in the past has gotten distracted by the "next big thing-be that broadband video, forming alliances with lots of producers, developing unique content that was expensive and didn't get the audience." But their most valuable assets to advertisers are what he calls a "Swiss-army knife" of opportunities for advertisers.
"Yahoo has a lot of strengths," he said. "They have extended properties that Google will never have. They're a search provider, general network, experts in targeting and building sweepstakes and promotion, and research."
Another former Yahoo-er said not to overlook the importance of chief technologist Zod Nazem leading the technology group. One oft-filed complaint against Yahoo is the company hasn't been innovative enough. Streamlining the technology teams will help reduce redundancies in services -- Yahoo Photos and Flickr, for example -- and spur quicker innovation.
Publisher and advertising group
In a statement announcing the release, Yahoo said the publisher and advertising group will be created by "combining Yahoo's broad array of marketing solutions, its industry leading sales teams, and its thousands of high quality distribution partners, to create a full-fledged global advertising network on and off Yahoo"
"We're moving aggressively to deliver the most possible value to our key customers -- audiences, advertisers and publishers -- and seize the major new opportunities we see ahead for the Internet," Mr. Semel said.
The changes go into effect Jan. 1 and do not include staff cuts; the re-organization is expected to be completed by the end of first quarter 2007.