Yahoo CEO Looks to Eliminate Bureaucracy, Revitalize Growth with New Management Structure

By Beecher Tuttle April 10, 2012

Just days after announcing Yahoo's largest round of layoffs in its 18-year history, CEO Scott Thompson unveiled the struggling Web firm's new vision that includes a revamped leadership structure and a strong emphasis on the company's core businesses.

In a company-wide memo leaked to various news sources, Thompson told employees that, effective May 1, Yahoo will be broken down into three main operating groups: Consumer, Regions and Technology.

The consumer group will focus on the user experience, with a particular concentration on media, commerce and connections, which includes search, communications and social properties like Yahoo Mail, Messenger and Answers, among others. The media and connections subdivisions will be led by Ross Levinsohn and Shashi Seth, respectively, while the head of the connections group will be named “shortly” (All Things Digital's Kara Swisher believes PayPal exec Sam Shraugher will fill the role).

The regions division, meanwhile, will focus on creating a greater ROI through advertising and sales. The three geographical groups under this division – the Americas, APAC and EMEA – will be fully accountable for their own revenue streams, said Thompson, who took the post in January after a successful run as the president of EBay.

Each of the two aforementioned groups will be supported by the technology hub, led by Mark Morrissey and David Dibble, who will be manage Yahoo's infrastructure and platforms.

The new realignment is a clear effort by Thompson to eliminate the well-noted bureaucracy that has dominated Yahoo for the last half-decade and to refocus on revenue-generating services. In 2011, Yahoo's revenue-generated-per-employee was well less than half that of its Web competitors, according to the L.A. Times.

“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,” Thompson noted in the memo. “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 is scheduled to sit down with the entire Yahoo team later on Tuesday to discuss the details of the restructuring effort. Many analysts expect that Thompson will eventually announce more job cuts as he continues to purge underperforming and redundant business units.

Next up for Thompson is to untangle the mess that Yahoo has created with its Asian partners Alibaba Group and SoftBank.

Edited by Jennifer Russell

TechZone360 Contributor

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