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The Globe and Mail

Yahoo's new plan: Speed through decentralized product teams

In this Jan. 4, 2012 file photo, the company logo is displayed at Yahoo headquarters in Sunnyvale, Calif. Yahoo Inc.last week announced it was laying off 2,000 employees as new CEO Scott Thompson sweeps out jobs that don't fit into his plans for turning around the beleaguered Internet company. The cuts announced Wednesday represent about 14 percent of the 14,100 workers employed by Yahoo.

Paul Sakuma/Paul Sakuma/AP

Yahoo's new chief executive officer spelt out a new organizational structure and leadership team on Tuesday to try to bring growth back to the Internet portal company.

The changes mark an attempt by Scott Thompson to decentralize decision making and speed up the creation of new services at the company, which has lagged behind faster-growing rivals despite making early inroads in areas like search and mobile.

Despite moving fast since his appointment in January, however, Mr. Thompson faces considerable headwinds in his efforts to revive Yahoo, whose shares have continued to lag other Internet stocks this year.

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Among the challenges are his move to cut back 14 per cent of the company's staff, unveiled last week, and the aftermath of a series of earlier failed reorganizations and senior management departures that have left many staff demoralized.

In an internal e-mail to staff ahead of a company-wide meeting on Tuesday, Mr. Thompson continued to place an emphasis on the need to bring back speed to Yahoo's operations as the most important challenge it faces.

Central to the new structure is the creation of a new consumer group with managers that have responsibility for their own product development, replacing the previous, centralized product development team.

"We are bringing dedicated product engineering resources into each unit, much closer to our users," Mr. Thompson wrote to staff. He also confirmed the departure of Blake Irving, a former Microsoft executive, whose resignation as head of product development at Yahoo was first reported last week.

The key figures in Mr. Thompson's new leadership group include Ross Levinsohn, previously in charge of advertising in the Americas region and a former head of News Corp's Fox Interactive group, who will take charge of a new media division inside the consumer group.

Shashi Seth, previously head of search, will assume control of a "connections" division, giving him responsibility for all the company's communications services as well as search. The head of a third division in the consumer group, covering ecommerce, has yet to be named.

Another executive rising in the shake-up is Rich Reilly, a long-time Yahoo executive who Mr. Thompson credited with making "extraordinary strides" in putting Yahoo on the map in Europe, not traditionally one of the company's strongholds. He will take charge of advertising in the Americas, with a permanent replacement in Europe yet to be named.

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Despite Mr. Thompson's focus on reviving Yahoo's core business, shareholders have long hoped for a broader restructuring of the company to boost its value, most of which is tied up in its stakes in Chinese ecommerce company Alibaba and Yahoo Japan.

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