* CEO unveils early details of internal revamp
* Products division and its head, Blake Irving, to depart
* New focus on customer groups, expanding commerce
* Three new divisions: consumer, regions and technology
By Alexei Oreskovic
SAN FRANCISCO, April 10 Yahoo Inc Chief
Executive Scott Thompson outlined how the Internet pioneer will
revive itself by putting in place a new structure to sharpen its
focus on users, advertisers and overlooked areas such as
The company said last week it would lay off 2,000 people or
14 percent of its workforce, and it set in motion a broad
Thompson, a former PayPal executive credited with driving
growth at eBay Inc's payments division, said in an
internal memo on Tuesday the company would be organized along
three core divisions beginning May 1. Commerce, an area of
Yahoo's business that will receive new emphasis, will be
critical to future growth, Thompson said.
Once the dominant Internet media and search company, Yahoo
has been eclipsed by Google Inc and Facebook.
"To be very clear, our highest priority is winning in our
core business, and that will earn us the right to pursue new
growth opportunities," Thompson said in his memo.
Thompson, who was named Yahoo's CEO in January, will preside
over an all-hands staff meeting later on Tuesday.
The company's three new divisions will include a consumer
arm that will focus on media content under Ross Levinsohn and
comprise "connections" like Flickr, search and email, and
A new "regions" division will deal with advertisers, while a
technology division will handle Yahoo's infrastructure and
"You will hear more from our business leaders about their
plans to move each of these groups forward in the coming days
and weeks," Thompson said in the memo.
"Ultimately, only our customers will decide whether we win
or lose in the market."
As expected, the new structure does away with a centralized
products group that straddled several client types, formerly
headed by Blake Irving, who will depart in coming weeks and is
not expected to be replaced.
FROM MEDIA TO COMMERCE
Yahoo releases first-quarter results on April 17. On
Tuesday, its shares were down 1.1 percent at $14.93 in early
"Right now they're just trying to put all the pieces in
place and trying to figure out some kind of coordinated way to
move forward. It's pretty obvious the new leadership thinks they
need to be leaner," said Michael Yoshikami, fund manager for
Destination Wealth Management.
"All the reorg is really secondary to really figuring out
what Yahoo wants to be."
Thompson's Tuesday memo also mentioned expanding beyond
Yahoo will soon name an executive to head up a new team to
wring more advertising revenue from existing businesses covering
automobiles, shopping, travel, jobs, personals and real estate.
In media -- a key area for Thompson's predecessors -- the
CEO plans to highlight Yahoo's customary news, finance, sports
and entertainment pages, and work closely with content producers
and editors on breaking news as well as pivotal events such as
this year's Olympic Games and the coming U.S. elections.
The layoffs and internal overhaul come as Yahoo's revenue
falls under competition from Google and Facebook. Last year,
Yahoo's revenue totaled $4.98 billion, compared with Facebook's
$3.71 billion, a number achieved with just 3,200 employees.
Yahoo is also fighting a battle with hedge fund manager
Daniel Loeb, whose Third Point is the company's largest
institutional shareholder with a 5.8 percent stake. Loeb is
seeking to appoint four new board directors.
"It's time for Yahoo to move forward, and fast," Thompson
said in his memo.