A More Streamlined Yahoo?

What’s next for Yahoo? The embattled Web giant may be banking on a ‘less is more’ strategy if reports of pending management reorganization are true.

Over the weekend, rumors swirled that new Yahoo (NASDAQ: YHOO) CEO Carol Bartz is set to announce a management reorganization designed to speed the company’s operational efficiency. A memo Bartz sent to employees last Friday ended with “Get well-rested, because next week’s a biggie,” helping spark rumors of a reorg this week.

Separately and perhaps unrelated to any reorg, the head of Yahoo’s news division has left the company. Publishing giant Hearst announced today that it hired Neeraj Khemlani to the new position of vice president and special assistant to the CEO for digital media.

Khemlani, 38, was vice president and general manager of Yahoo News & Information and had been at the company for almost three years. Previously, he was a producer for the CBS show “60 Minutes.”

In response to an e-mail request for comment on the possible reorg, a Yahoo spokesperson said the company doesn’t comment on rumor and speculation. As for Khemlani’s departure, the company issued the following statement:

“Neeraj Khemlani will be leaving Yahoo after nearly three years in a number of roles, the most recent as the general manager and executive editor of Yahoo News. We are sorry to see Neeraj go, but we wish him the very best. Hearst and Yahoo have enjoyed a strong partnership for a number of years and we look forward to a positive, long-standing partnership with Neeraj and Hearst in the future.”

An overdue reorg?

IDC analyst Karsten Weide said a reorg could greatly enhance Yahoo’s ability to focus and react to a fast-changing marketplace and he hopes, for the company’s sake, the rumors are true.

“Streamlining upper management makes total sense,” Weide told InternetNews.com. He thinks a number of people are likely to be let go. “Yahoo has hundreds of VPs and upper middle management. They can afford to lose some because it’s going to save them money and accelerate decision making which is well known to be a fairly slow and complicated process at Yahoo.”

Before joining IDC, Weide ran Yahoo Germany in the mid-1990s.

Yahoo laid off about 1,500 employees in December, but these were across the board and not specifically targeted at upper-level management.

One of the criticisms of the Bartz appointment is her lack of experience running an Internet company. Bartz was CEO of CAD-supplier Autodesk for 14 years, starting in 1992. She also serves on the boards of Cisco (NASDAQ: CSCO) and Intel (NASDAQ: INTC).

While that lack of Internet experience isn’t a plus, Weide said Bartz brings other positives to the table. “She strong operationally and knows how to run an engineering organization,” said Weide.

“They need to focus on stuff they can be number one or two in, like search and display advertising, and dump everything else,” added Weide. “I wouldn’t be surprised if she goes through all the Yahoo properties with a fine tooth comb.”

Controversy over Yahoo’s breadth of offerings is nothing new. Back in 2006, then-senior vice-president of the company Brad Garlinghouse penned his much discussed “Peanut Butter Manifesto” that said Yahoo was spread too thin and needed to better focus its resources.

Both Garlinghouse and Terry Semel, then CEO, have since left the company.

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