San Francisco — Yahoo Inc.’s new Chief Executive Officer Carol Bartz on Thursday announced in a detail-free blog post took the wraps off a broad reshuffled management plan designed to break-apart what she called the “silos” that had slowed down the Internet company, while naming a Chief Marketing Officer and announcing the departure of Chief Financial Officer Blake Jorgensen, who just a day earlier made a presentation at a tech conference, in a bid to regain ground lost to Google Inc.
While Yahoo’s CFO and mobile czar pack their bags, Bartz is making her presence felt, with a new focus on improving relations with customers, she explained:
“Today I’m rolling out a new management structure that I believe will make Yahoo a lot faster on its feet,” Bartz said in a blog post Thursday. “For us working at Yahoo, it means everything gets simpler. We will be able to make speedier decisions, the notorious silos are gone, and we have a renewed focus on the customer,” Bartz said. “For you using Yahoo every day, it will better enable us to deliver products that make you say, ‘Wow.’”
The moves are being viewed as positive, specifically, as Yahoo is abolishing some fiefdoms and setting up a group to pay more attention to customers, indicating that Bartz, “The new sheriff on the Yahoo blog is dictating the law, and there is no longer any doubt who will make the key decisions, and make them quickly in order to streamline operations”.
All the major executives report directly to Bartz now.
The move came as Jorgensen, 49, became the latest executive to announce his departure from Yahoo, which has struggled to convince Wall Street that it has a growth strategy after turning down a takeover bid from Microsoft Corp last year. Jorgensen will end his duties after a transition period, Sunnyvale, California-based Yahoo said in a statement.
“Jorgensen is the most senior executive to depart since Bartz took over from co-founder Jerry Yang last month.”
Nevertheless, the changes covers weeks of meetings and discussions between Bartz and various division heads as she familiarized herself with Yahoo’s many businesses.
Yahoo is re-structuring its organizational chart to speed up decision-making as Google pulls further ahead in the online advertising market. That may be a challenge, given Google’s lead and the growing popularity of sites such as Facebook Inc., said James Friedland, an analyst at Cowen & Co. in New York.
“Yahoo definitely could use a culture shift in terms of developing products more aggressively and more efficiently,” Friedland said. “I just do not think it can change the greater trends. We do not think the changes will have a material impact on Yahoo’s material long-term fundamentals.”
The move is the first major one since Bartz took over the helm at from co-founder Jerry Yang in January, she said she did not plan to sell the company and did not want it to be “pulled apart and left for the chickens.”
“People here have scooped the hell out of me. They are smart, dedicated, passionate, driven, and really nice. There is so much great energy and frankly lots of optimism. But there is also quite a lot that has bogged this company down. For starters, you would be astonished at how complicated some things are here,” she said in the blog posting.
In an effort to make sure that Yahoo personnel listen to outsiders as well as themselves, Bartz established a new customer advocacy group.
“I have observed that a lot of us on the inside do not spend enough time looking to the outside. That is why I’m creating a new customer advocacy group. After getting a lot of furious calls at my office from disappointed customers, I realized we could do a better job of listening to and supporting you,” she said.
Here are the details:
Our aim as a company is simple: to consistently deliver impressive consumer and advertiser experiences everywhere in the world we do business. So we are creating an organization to enable improvements in our product quality and operational efficiency, as well as clear decision making and accountability.
Yahoo will combine product and technology work into one group headed by Ari Balogh, who adds executive vice president of products to his chief technology officer title. His group is “responsible for the vision, strategy, and quality” of all Yahoo’s products globally. He reports to Bartz.
There are now two regions – North America and International. The regions are responsible for delivering Yahoo!’s products, programming and services to consumers, partners and advertisers in local markets. “For delivering those products to North American sector will be led by Hilary Schneider, EVP, North American Region, International’s leader will be hired soon,” Yahoo said. These leaders report to Bartz. Previously, Yahoo had separate groups for North America, Europe, Asia-Pacific, and emerging markets.
These changes are not similar to Yahoo’s so-called earlier matrix management structure, which was criticized for lacking clear reporting lines, the new organization centralizes power and control around Bartz.
“It corresponds to much more of a classic business organization,” said Gartner analyst Allen Weiner, adding that a centralized approach helps innovations get to market faster.
Weiner also remarked that Bartz, who replaced co-founder Jerry Yang in January, is Yahoo’s first CEO with the business background that he said is best-suited to implementing such a structure.
(For more details, click here and View the full Bartz gang–a breakdown of Yahoo’s reorganization here)
Investors obviously enjoyed what little they heard, as Yahoo’s stock is moved up 5% so far today. The stock rose yesterday as well after Jorgensen’s comments indicated Yahoo might be open to a search deal, though what he said was nothing Yahoo executives had not said before. Many investors still hope for at least a search advertising deal with Microsoft, whose overtures Yang and Yahoo’s board rebuffed repeatedly last year.