Yahoo’s CEO Scott Thompson emailed his staff last Thursday to reassure employees about the company’s strategy. The new Yahoo could be a much small entity with a focus on media and advertising, with the layoff targeted at the product, research and marketing groups. Yahoo’s CEO Scott Thompson has convened top management to outline the restructuring plans and will officially announce a rumoured restructuring.
The internet company yesterday outlined how it will revive itself by putting in a place to implement a new structure in order to sharper its focus on users, advertisers and to overlook some of the areas. Thompson 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.
“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. 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 e-commerce. A new “regions” division will deal with advertisers, while a technology division will handle Yahoo’s infrastructure and platforms.
“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.”
Here is a copy of memo (via WSJ):
It’s time for Yahoo! to move forward, and fast. And as we do, I want every one of us to keep one thing top of mind: what we do is about our customers, not about us. For Yahoo! to win in our core business, every one of us must put our customers first. Specifically, we must focus all we do on the users who trust us to give them personalized content and communications, and the advertisers who want to connect with our users. 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.
To accomplish that we’re establishing a new leadership structure, organizing all of our activities around Yahoo!’s customers. Effective May 1, Yahoo! will operate in three groups — Consumer, Regions and Technology — all supported by our established Corporate teams. Each of the three groups will be charged with delivering the best customer experiences and have very clear accountability for getting results.
Our new Consumer group will be all about creating great, engaging user experiences. Our geographic Regions will serve our advertisers and agencies and be accountable for all Yahoo! revenue. Our Technology teams will provide the advanced infrastructure, technology and science to enable our Consumer group and the Regions to deliver our best products and experiences into market, at scale, and fast.
Our success is determined by how well we engage consumers and give them fun and informative experiences that they feel were designed just for them, on all screens. Our Consumer group will include three units — Media, Connections, and Commerce — and each will provide users the uniquely relevant and personalized content and services they expect and deserve, leveraging Yahoo!’s vast consumer interest data. We will redouble our focus on Yahoo!’s competitive advantage — our core, owned and operated (O&O) consumer properties. And importantly, we are bringing dedicated product engineering resources into each unit, much closer to our users.
• Media Our online media presence has long been our company’s clearest competitive advantage. Our Media group, led by Ross Levinsohn, will include all our media businesses globally with our marquee properties at the forefront: Homepage, News, Finance, Sports, and Entertainment. We will bring top design and engineering talent and differentiated technology — like Yahoo!’s Publishing Platform (YPP) — into close partnership with content producers and editors. Ross and his team will continue to drive real differentiation into our leading media experiences, including everything from our original coverage of breaking news events to tentpole events like the Royal Wedding and the upcoming Olympics and US Elections.
• Connections will be led by Shashi Seth, and include consumer businesses that connect and inform our users including Search, Communications and Social properties such as Mail, Messenger, Flickr, Answers, and more. The highest priority for Shashi and his team will be to think well beyond how users search, communicate and share online today. The Connections team is charged with fundamentally re-imagining how we design and deliver the next generation of these foundational Yahoo! experiences.
• Commerce We will renew our focus on commerce, and I expect this newly created team to play a critical role in Yahoo!’s future growth. Our Commerce teams will build on Yahoo!’s massive reach and strong consumer relationships, but their charter will go beyond traditional ecommerce. The focus of this team will be driving higher ROI for advertisers and agencies that reach users on Yahoo! by closing the loop for them between user interests, advertiser spend, consumer intent, and purchase behavior. The foundation of the new Commerce group will be Autos, Shopping, Travel, Jobs, Personals and Real Estate. We expect to name the leadership of this business unit shortly.
Advertisers and agencies are the primary customers and focus for each of our three regions. Our regional sales teams will be the advocate and voice for our advertising customers: listening to them and driving their needs into the products we develop. Regional sales must bring urgency and tenacious sales execution to all we do for advertisers. In addition, these teams will leverage our unique and vast data resources to position Yahoo! as the place to connect with users and generate the best, measurable ROI on their ad spend.
• Americas will be led by Rich Riley, who led the team responsible for extraordinary strides in EMEA in recent years putting the region on a path of consistent engagement and revenue growth, as well as meaningful market share and profit gains. Rich will be moving from Europe to our New York office soon.
• APAC, which includes many of our fastest-growing countries and strongest consumer products, will continue under the exceptional leadership of Rose Tsou.
• EMEA will be led on an interim basis by Christophe Parcot, EMEA’s regional sales leader, as we commence the search for a new leader for the region.
Americas, EMEA, and APAC will be fully accountable for Yahoo!’s revenue in their respective regions. I expect our Regional leaders and teams to work in very close collaboration with Ross and our other Consumer group leaders to fully align their goals for revenue and engagement as well as their execution, keeping our users and advertisers top of mind.
Our Consumer group and the Regions will continue to be supported by some of the most talented technology professionals in the industry, providing the advanced platforms and technology that allow Yahoo! to deliver great customer products.
• Core Platforms, led by Mark Morrissey, will provide the foundational platforms, technology, and research to enable great customer products and leverage Yahoo!’s vast data stores to enable deep personalization and optimized monetization. Mark’s teams will lead Apt, RMX, User Data & Analytics, our content optimization relevance engine (CORE), Yahoo! Labs and other key technology functions.
• Central Technology will continue to be led by David Dibble and include our data center and service engineering efforts, as well as our cloud infrastructure teams.
Yahoo! has made real progress in building modern, scalable platforms and infrastructure, but to move at the rapid pace our customers and our industry require we need more than scalable technology. This is among the most important changes we’re making: we must bring some of our best product designers and engineers much, much closer to consumer needs and demands. Many of our top engineers will continue building on our foundation platforms and technology to continue to drive speed and scale. But to ensure we really know and can serve our customers, we’ll also deploy top design and engineering talent into our Consumer business units, directly supporting our users’ favorite Yahoo! products to ensure we move much faster and meet customer needs with every product we deliver.
Our major corporate functions will continue to support these new groups. Finance, Legal, and HR will remain under the strong leadership of CFO Tim Morse, General Counsel Mike Callahan, and Chief HR Officer David Windley, respectively. As we search for a Chief Marketing Officer, Penny Baldwin will serve as interim leader for the Corporate Marketing and Communications teams. John Kremer will lead a newly-created Transformation team that will ensure full implementation of and accountability for our restructuring and related organizational changes.
Chief Product Officer Blake Irving has decided to leave Yahoo! and will work closely with the new leaders over the next several weeks to ensure a smooth transition. He has made a tremendous contribution to the advancement of Yahoo!’s product strategy and execution over the last two years and I know you will join me in wishing him all the best in the future.
You will hear more from our business leaders about their plans to move each of these groups forward in the coming days and weeks. As we look to Yahoo!’s future, all of us must remember to always keep our customers first in everything we do. Ultimately, only our customers will decide whether we win or lose in the market.
I look forward to speaking with you at our All Hands Tuesday. If you have questions before we meet, please check Backyard for information and answers. If you don’t see the answers you need, please post questions on Backyard, or you may email questions directly to the leadership team.