RealTime IT News

Yahoo Plays Musical Chairs at the Top

Yahoo , facing intense scrutiny after a senior executive wrote a detailed memo criticizing the company's operations, is reorganizing the company.

Yahoo COO Dan Rosensweig will be leaving Yahoo at the end of March. John Marcom, senior vice president of international operations, and Lloyd Braun, head of Yahoo's media and entertainment group, are also leaving to "pursue other opportunities," a Yahoo spokesperson confirmed.

The spokesperson said Rosensweig left on his own accord and credits him with being one of the key architects of the reorganization of its business structure into three operating groups: Advertiser & Publisher; Audience Group; and Technology Group.

CEO Terry Semel will oversee the three groups upon Rosensweig's departure.

Yahoo CFO Susan Decker will head the Advertiser & Publisher Group, which will combine Yahoo's sales teams and distribution partners to provide marketing solutions across Yahoo's properties worldwide. Yahoo said the search is under way for Decker's replacement and that she will serve as CFO in the interim.

The Audience Group, to be headed by an as-of-yet unnamed executive, will focus on enhancing and creating Yahoo products to engage its users. And CTO Farzad Nazem will head the Technology Group, which is charged with creating platforms for new social media environments.

The executive reshuffling, which is expected to be complete by the end of March, comes weeks after Yahoo Senior Vice President Brad Garlinghouse released the so-called "Peanut Butter Manifesto," a memo criticizing Yahoo's corporate structure that called for "a radical reorganization."

The document followed months of bad news for Yahoo during a year when some analysts said Yahoo was losing advertising ground to rivals Google , Microsoft  and AOL .

Yahoo isn't ready to credit the memo as the "call to action," as Garlinghouse himself described it, denying that the document is the reason for the reorganization.

"These changes have been in motion for a number of months," Gaude Lydia Paez, Yahoo director of public relations, told internetnews.com. "They are well thought-out and are aligned with our strategic objectives and mission."

In a point of departure from the strategy outlined in the Garlinghouse memo, which called for a 15 percent to 20 percent thinning of the Yahoo workforce, Paez said, "We are continuing to hire throughout the organization. This announcement is about organizing for growth."

But if Yahoo's Wall Street fortunes change with the reorganization, many will credit Garlinghouse for his "Peanut Butter Manifesto," which refers to the way Yahoo spreads "peanut butter across the myriad opportunities that continue to evolve in the online world."

Financial analysts from Merrill Lynch and Bear Stearns reacted optimistically to the news.

"The reorganization is consistent with management commitment to improve operations and monetization, a key component of our Buy thesis," Merrill Lynch analyst Justin Post wrote in response to the news.

Bear Stearns's Alexia Quadrani applauded the moves.

"We see these changes as a positive for YHOO shares," Quadrani said. "While moving around the pieces doesn't necessarily increase the value of the pie, the fact that the company is addressing the issue and making a change will be well viewed in our opinion."