Another Yahoo Reorganization: Memo Signals Focus on Content, Not Ads

By Scott M. Fulton, III | Published August 30, 2007, 11:52 AM

Newly elevated Yahoo President Susan Decker issued a memo to employees detailing another massive organization for her company, which for the third time in a mere nine months realigns its business operations under reappointed leadership. Gone is the executive said to have spearheaded the takeover of ad market broker Right Media last April, and the fate of one of the company's most outspoken senior VPs appears uncertain.

"Building on the success that we have had in aligning our sales and distribution organizations around customers, rather than around advertising products like search and display, the two major changes we are announcing today are designed to take this to a higher level," reads Decker's memo to employees yesterday, first published by PaidContent.org. Sounding much more like a content producer than a search or advertising platform, she added, "They will also better align our resources and priorities focused on building key audiences."

Echoing many of the themes raised last year in last year's now-classic "Peanut Butter Manifesto" - a challenge by SVP Brad Garlinghouse to stop glossing over inefficiencies and begin rethinking the company - Decker wrote about improving the decision-making process, and about focusing the interests of her company toward customer needs, rather than inventing new services and driving customers to need them.

But missing from her memo yesterday was any mention of Garlinghouse himself, who may literally have been the inspiration for the chain of events that catapulted Decker out of an effective demotion from CFO to the presidency of her company. Since last February, Garlinghouse has been rumored to be courted by Fox Interactive Media's MySpace. FIM parent company News Corporation had no announcement this morning.

Under the new alignment, Yahoo's "Network division" is to be defined not the way Cisco defines "network," but more like NBC or HBO. Long-time Yahoo executive Jeff Weiner remains in charge there, but his responsibilities and prominence will increase, taking charge of the company's Local Markets and Commerce group. This way, Yahoo adopts more of the tone and approach of a publisher or broadcaster.

But it's a two-way network, as the company's Customer Management team has been rewired to report directly to Decker.

As analysts noted this morning, the company's technology divisions remain in disarray, as leadership and alignment there has yet to be worked out. Meanwhile, Decker's approach to tackling the advertising reorganization process appears to be less focused on driving new technology - which was Yahoo's strategy last year - and more toward building more effective content and driving sales. Most of yesterday's new appointments were sales-oriented.

Since last December's initial reorganization, which some say was triggered by the Garlinghouse memo, Yahoo's former media head, Lloyd Braun, has founded a new multimedia production studio along with recently removed Paramount chief Gail Berman. Two key Yahoo executives have left the company on their own accord this year to join their former boss at the new BermanBraun studio, and observers today are looking to see if any more names shaken out of the Yahoo tree will fall in Braun's direction.