Yahoo reorganizes businesses under Decker
SAN FRANCISCO/NEW YORK (Reuters) - Yahoo Inc unveiled on Thursday the third phase of an extended reorganization, bolstering the operational control of President Sue Decker, as the company hones its independent strategy after rebuffing Microsoft Corp.
The changes centralize the management of once-separately run consumer services into a new "audience organization," Decker said in a phone interview.
The move, following similar changes to Yahoo's advertising business and the elevation of Decker and CEO Jerry Yang to power over the past year, is aimed at better capitalizing on the growth of Web advertising through Yahoo's large audience.
Yahoo boasts more than 500 million visitors to sites ranging from e-mail to search to finance, news and sports.
But the reorganization, widely anticipated in recent weeks, failed to rally Yahoo's slumping stock amid a market sell-off that sent the Dow Jones index to a 21-month low.
Yahoo shares closed 2.9 percent lower at $21.37 on Nasdaq as investors continue to discount the value of its independent strategy versus the previously expected Microsoft-Yahoo deal.
The three new teams being created, all reporting to Decker, include an audience products division led by Ash Patel, who had run platforms and infrastructure -- Yahoo's technology side.
A new U.S. regional division will be led by Hilary Schneider, who had run the global partner solutions group in charge of the company's advertising. Yahoo also created an "insights strategy team," whose leader has yet to be named.
The U.S. group will work in parallel with three existing international business units for Asia, Europe and emerging markets. No management changes were made there, Decker said.
In addition, Ari Balogh, who joined as chief technology officer five months ago, has taken on increased powers and will consolidate separate technology platforms used to run different consumer services into a group led by Venkat Panchapakesan.
The changes were preceded by some top executive departures. Yahoo leaders and outgoing executives said the exodus was due to a variety of motives, with many leaving for personal reasons and only a few departures related to the latest reshuffle.
Jeff Weiner, once in charge of consumer services, left the company following the birth of his first child last month and plans to return to work in September as an "executive in residence" at two Silicon Valley venture capital firms.
Decker said Qi Li, vice president of engineering in charge of the search system overhaul dubbed Project Panama -- left for reasons unrelated to the reorganization.
Brad Garlinghouse -- head of Yahoo's communications and communities business and famous for an internal memo dubbed the "Peanut Butter Manifesto" calling for drastic strategic changes -- will leave shortly, Decker confirmed.
Separately, shareholder activist Carl Icahn renewed pressure on Yahoo to merge with Microsoft in his latest proxy filing ahead of a showdown at the August 1 shareholder meeting.
Icahn reiterated plans to hire a "talented and experienced CEO" and return Yang to his prior role as "Chief Yahoo" -- executive without portfolio and cheerleader for the company.
GROWING POWER
In organizational chart terms, Decker now has four regional divisions instead of three. Marketing products, mobile Internet and corporate marketing are unchanged while the Audience division replaces what had been the Yahoo Network group and Schneider's partnership division folds into other functions.
Several Wall Street analysts said the reorganization emphasizes Decker's growing power at Yahoo.
"It begs the question, what is Jerry Yang doing?" Sanford C. Bernstein analyst Jeffrey Lindsay said. "It looks like there has been a significant shift in power towards Ms. Decker."
"Clearly if there are three new groups reporting to her that would suggest to us that she's taking a larger role in operations," he said.
Canaccord Adams analyst Colin Gillis agreed, saying: "We certainly see Sue taking an increasingly active role in the company and Jerry probably likes his Chief Yahoo title after what's been a very grueling year."
In a statement, Yang said the latest changes would help Yahoo capitalize on the convergence of the two primary types of Web advertising -- search and display ads. Users see search ads alongside keyword search results, while display ads, preferred by many corporate brand marketers, run on content pages.
Decker told Reuters a restructuring of the consumer-facing side of the business and recent executive departures did not reflect a broader change of power within Yahoo's senior ranks.
"It doesn't really change the scope of my responsibilities," she said. "I am responsible for the business and Ari is responsible for the technology and engineering."
(Editing by Braden Reddall)
