The scope of Yahoo Inc.’s reorganization of its structure and management has left many in the industry in awe, as the Internet survivor has redirected its efforts toward strengthening its relationships with audiences, advertisers and publishers.
The company claims the strategy is to align its operations with its key customer segments – audiences, advertisers and publishers – and better leverage its strengths to capture growth opportunities.
“Yahoo has had problems getting momentum in some key areas, specifically search technology,” said Charlene Li, analyst at Forrester Research, Cambridge, MA. “As a result, it has been losing significant market share to Google.”
The new structure pursues four goals:
• Expand customer-centric culture and capabilities.
• Create leading social media environments.
• Lead in next-generation ad platforms.
• Drive organizational effectiveness and scale.
“The core focus on audience will put Yahoo users at the center of attention for a key group, meaning that there will hopefully be a unified audience strategy,” Ms. Li said.
Yahoo, Sunnyvale, CA, plans to deliver solutions for advertisers and publishers worldwide by organizing its services around audience segments and advertising customers rather than around products.
The company also plans to use its position in community, communications, search and media content across its global network in order to create social media environments. This effort 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.
“I see the recent Yahoo reorganization as a positive move for both Yahoo and the industry,” said Ellen Siminoff, CEO of search firm Efficient Frontier, Mountain View, CA. “The upside for the industry is if Yahoo can execute well with both [its] new organizational structure and [search ad platform] Panama, it will make them a stronger player and should be able to increase the monetization of their pages and ad spend overall.”
Yahoo also said it wants to focus on high-impact, network-wide platforms to capture the best long-term growth opportunities.
Under the new structure, Yahoo will have an audience group and an advertiser/publisher group, each led by a senior operating executive, as well as a strengthened technology group headed by the chief technology officer. All three executives will report directly to chairman/CEO Terry Semel.
“Up to now, there has been confusion about which audiences Yahoo serves and, frankly, disjointed products that were being developed in isolation of each other,” Ms. Li said. “The reorganization should help the company focus its efforts.”