Yahoo boss dismantles "notorious silos"

 

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By Reuters

Posted on 27 Feb 2009 at 09:29

Yahoo chief executive Carol Bartz has taken the wraps off a company-wide reorganisation plan designed to dismantle the "silos" slowing down the internet company.

Bartz's plan is aimed at simplifying Yahoo's management structure, and will see its various technology and product groups combined into one entity led by CTO Ari Balogh.

Yahoo will also combine its global divisions into two groups instead of four: North America, led by Hilary Schneider and International, whose chief has yet to be named.

"Today I'm rolling out a new management structure that I believe will make Yahoo a lot faster on its feet," says Bartz. "We'll be able to make speedier decisions, the notorious silos are gone, and we have a renewed focus on the customer."

Unlike Yahoo's previous so-called matrix management structure, which was criticised for lacking clear reporting lines, the new organisation centralises power and control around Bartz.

She also unveiled a new "customer advocacy group" to better attune the company to the outside world: "After getting a lot of angry calls at my office from frustrated customers, I realised we could do a better job of listening to and supporting you."

"What we really want to see is what direction does Carol want to go. That's the first step," says Pacific Crest Securities analyst Steve Weinstein. "And the second step is how well she actually executes."

Weinstein believes the true test of Bartz's mettle will be in how she handles the fate of Yahoo's search business. There has been long-running speculation the unit could be sold to Microsoft, or Yahoo could team up with another rival such as 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 US antitrust review.

Earlier this week, Microsoft CEO Steve Ballmer reiterated his desire to team up with Yahoo to compete with Google, which controls 63% of the US search market.

"It's premature to discuss our strategic options," says a Q&A document distributed by Yahoo management to employees on the restructuring. "For the time being, nothing is off the table and creating shareholder value is our first priority."

Yahoo says the changes are not driven by a desire to cut costs, but reviewing its business and expenses.

In October, Yahoo announced plans to cut at least 10% of its workforce of roughly 15,000 employees. It posted a fourth-quarter net loss of $303 million, while sales fell 1% from a year earlier to $1.8 billion.