SAN FRANCISCO (Reuters) - Yahoo Chief Executive Carol Bartz on Thursday took the wraps off a broad reorganization plan designed to dismantle what she called the “silos” that had slowed down the Internet company.
The move came as Chief Financial Officer Blake Jorgensen became the latest executive to leave Yahoo, which has struggled to convince Wall Street that it has a solid growth strategy after turning down a takeover bid from Microsoft Corp last year.
Under the plan to simplify Yahoo’s management structure, its various technology and product groups will be combined into one entity led by Chief Technology Officer Ari Balogh, according to an email Bartz sent to employees.
Yahoo will also divide the world into just two regions -- North America and International -- from four previously.
“Today I’m rolling out a new management structure that I believe will make Yahoo a lot faster on its feet,” Bartz, who took the CEO reins six weeks ago, wrote on Yahoo’s corporate blog. “We’ll be able to make speedier decisions, the notorious silos are gone, and we have a renewed focus on the customer.”
The changes follow weeks of meetings between Bartz, who replaced co-founder Jerry Yang in January, and Yahoo’s various division heads as she familiarized herself with the company’s many businesses.
Yang’s 18-month stint as CEO was defined by his rejection of a $47.5 billion takeover bid from Microsoft, which the software maker subsequently withdrew.
Yahoo’s stock price has sunk from $19.18 before Microsoft’s offer to below $13 on Thursday, as revenue and profits have been pinched by an industrywide slowdown in advertising spending.
The goal of the new organization is to deliver the best possible consumer and advertiser experience, with greater speed and efficiency, according to a Q&A document distributed by Yahoo management to employees.
“It’s premature to discuss our strategic options. For the time being, nothing is off the table and creating shareholder value is our first priority,” it said. Yahoo added the changes were not driven by a desire to cut costs, but that the company is constantly reviewing its business and expenses.
TOP CONCERN: SEARCH BUSINESS
Pacific Crest Securities analyst Steve Weinstein said Bartz, the former CEO of software maker Autodesk Inc, has shown herself to be decisive and unafraid to take action in her short time at the company. But he noted that a reorganization alone is not enough to revive Yahoo’s fortunes.
“What we really want to see is what direction does Carol want to go. That’s the first step,” Weinstein said. “And the second step is how well she actually executes.”
Among the most pressing questions on investors’ minds is the fate of Yahoo’s search business, which is a distant second to Google Inc. There has been long-running speculation that the unit could be sold to Microsoft, or Yahoo could team up with another rival such as Time Warner Inc’s AOL.
Yahoo tried to form a Web search partnership with Google last year as an alternative to a deal with Microsoft, but the deal collapsed under U.S. antitrust review.
On Wednesday, Jorgensen had told attendees at an investor conference that Yahoo was not opposed to a sale or partnership deal on search, leading some observers to believe that the company was moving closer to a deal with Microsoft.
Earlier this week, Microsoft CEO Steve Ballmer said a potential partnership with Yahoo as a means of competing with Google, which controls 63 percent of the U.S. search market.
Yahoo shares rose as high much as 7.3 percent to $13.39 on Jorgensen’s comments. They were up nearly 4 percent at $12.98 on Nasdaq late Thursday.
SEARCHING FOR CFO
Yahoo has initiated a search for a new CFO, and Jorgensen will remain through a transition period, Yahoo said in a filing with the U.S. Securities and Exchange Commission on Thursday.
Bartz also said in the memo that Marco Boerries, head of the company’s Connected Life group, has resigned. The Connected Life group, which focused on bringing Yahoo products to mobile devices, will be integrated into various parts of the new organization.
And she announced that Elisa Steele, an executive at NetApp Inc, will join Yahoo as chief marketing officer.
Hilary Schneider will continue to lead North America, while an international chief has yet to be found.
“International growth is critical for Yahoo, which has become too reliant on its U.S. business over the years,” Bartz said in the email to employees.
A Yahoo spokeswoman said the company would not provide any official announcement on the reorganization, other than Bartz’s blog post, calling it an internal matter.
In October, Yahoo announced plans to cut at least 10 percent of its workforce of roughly 15,000 employees. In the fourth quarter, Yahoo reported a $303 million net loss, while sales declined 1 percent year-over-year to $1.8 billion.
Reporting by Alexei Oreskovic, editing by Tiffany Wu, Richard Chang
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