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Is Another Reorganization Really the Answer to Yahoo!’s Problems?

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The House of Purple is undergoing yet another reorganization. The neighborhood's on fire, time to rearrange the furniture. That will save your major investment. Your marriage is heading for a divorce, time to rearrange your closet. That will fix everything.

Isn't that essentially Yahoo!'s philosophy? You don't notice the fire so much when you're tripping over the furniture and admiring the odd new view.

As long as you can find your favorite outfit, it doesn't matter that your husband, lover, best friends are leaving you.

From the Yahoo! viewpoint, it's like shuffling a deck of cards when you've had a bad run at blackjack. Perhaps from the dealer's point of view, this is good, if the dealer is Google. It keeps the people you're playing with from counting cards and making statistical calculations. Business, however, isn't about luck. It is about calculations and statistics. Yahoo!'s stats do not look good.

As a matter of full disclosure, at one time, I worked for Yahoo!.  At my request, a state government agency is investigating their employment practices.

I've experienced a few reorganizations. When I left the company, I couldn't remember the name of the department nor the team that I worked for because the department and team names had been changed so often, that even some managers had a hard time identifying department names. Apparently, Yahoo!'s board hasn't read much Shakespeare, where even the 13-year-old Juliet knew names really do not matter.

I came on as an Associate Editor; I left as a Search Enhancement Associate. What is a Search Enhancement Associate? That's just another obfuscation. It looks nice because several different categories of workers in the same pay bracket can be classified by this phrase and yet, let's face it, on a resume it means nothing. I wonder how much time was spent thinking up that job label.

New names, same faces and unfortunately, too often, same dumb strategies. Well, not all the same faces. According to PC World, in the reorganization announced on 26 June 2008, obviously some old faces weren't going to be around with this latest re-org including:

  • Jess Weiner, Executive Vice President of Yahoo!'s Network Division
  • Vish Makhijani, Senior Vice President of Search
  • Qi Lu, Executive Vice President for Search and Advertising Technology
  • Usama Fayyah, Executive Vice President
  • Stewart Butterfield and Caterina Fake who helped create Flickr
  • Brad Garlinghouse, Senior Vice President for Communications and Communities

Garlinghouse wrote the infamous peanut butter manifesto.

Is this re-org caused by the defection of these people or is it just a matter of habit? If you haven't been keeping track, Yahoo! also had a major reorganization at the beginning of December 2006. Terry Semel was still chairman and chief executive officer at that time. The press release claimed four main objectives:

* Expand customer-centric culture and capabilities — Yahoo! will develop rich experiences for each audience segment and deliver solutions to meet the needs of all advertisers and publishers worldwide. Yahoo! will organize its services around audience segments and advertising customers, rather than around products.

* Create leading social media environments — Yahoo! will leverage its strong positions in community, communications, search, as well as media content across its global network to create leading social media environments, which will encourage every user on the Yahoo! network to participate in the consumption and publishing of information, and knowledge through tagging, reviewing, sharing of images and audio, and other social media activities.

* Lead in next-generation advertising platforms — Yahoo! will extend its industry-leading breadth of offerings to give the most diverse array of advertisers, from large brand marketers to local merchants, every opportunity to connect with audiences on and off Yahoo!.

* Drive organizational effectiveness and scale — Yahoo! will recruit and retain the best industry talent and focus its resources on high-impact, network-wide platforms to help capture the most significant long-term growth opportunities.

Somehow they don't seem to be able to recruit and retain the best talent. Granted, Semel did get Tom Cruise to Sunnyvale in January 2006, which was after his May 2005 couch-jumping but before Katie Holmes became an unwed mother in April 2006. Despite the coup which was meant, I suppose, to help Yahoo!'s newly launched Answers, I think more Answers about Tom Cruise can be found on Gawker.com although, to be fair, the Scientology video was posted in February of this year, 2008.

In June 2007, Yahoo! unloaded chairman and CEO Terry Semel, who, after five years, had earned $500 million and had stock options worth $70 million according to Wikipedia. That touched off a reorg that brought Jerry Yang, Chief Yahoo and Yahoo! co-founder, to the CEO position. In February 2008, Yahoo's re-org included downsizing, unloading about a thousand people. Under Jerry Yang and Sue Decker these people weren't offered the Golden Parachute that Yahoo! had been negotiating for its other full-time employees with Microsoft as reported by CNET on 19 February 2008.

The golden parachute was not for those employees who had been laid off on 12 February 2008 such as myself. It was for those remaining employees should they lose their jobs in a Microsoft buyout.

Maybe Yahoo! should be less concerned with retaining the employees they have, particularly since some are leaping from what looks like a sinking ship, and checking into what those employees are doing and have been doing wrong.

According to the PC World article:

Reporting to President Sue Decker will be three new teams:

– the Audience Products Division, which will oversee product strategy and product management and will be led by Ash Patel, former manager of Yahoo's Platforms & Infrastructure group;

– the U.S. region, which will be led by Hilary Schneider, previously chief of the company's Global Partner Solutions group; and

– Insights Strategy, which is in charge of centralizing and executing "a common strategy for the use of data and analysis across Yahoo!," and the chief of which will be named later.

The new organizational structure will improve Yahoo's products and speed up decisions, the company said.

Apparently the customer-centric policies of June 2007 weren't so effective. I and every employee of Yahoo! did receive a purple card to remind us of our purpose in the house of purple. One one side it reads:

Our Purpose (in orange)
Yahoo! powers and delights our communities of users, advertisers and publishers—all of us united in creating indispensable experiences, and fueled by trust.
YAHOO!

The other side reads:

OUR VALUES
Excellence, Innovation, Customer Fixation, Teamwork, Community, Fun
OUR BEHAVIORS
Delight, Decide, Deliver,
Act as One Yahoo!

I wonder how much time and money was spent on those little "Our Purpose" cards, made to fit on our lanyards along with our ID cards. Looking at this all now, it reminds me of that IBM commercial about "ideating."

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