Yahoo’s Shakeup Is Underway, CFO Out

UPDATED: Yahoo’s new CEO wasn’t kidding. Carol Bartz laid out the portal giant’s expected management shakeup in a blog post today that outlined her management team’s plans to turn the company’s fortunes around.

The title of Bartz’s blog post set the tone for the changes: “Getting our house in order.”

Bartz wrote that she’s creating a new “Customer Advocacy group that will be charged with doing a better job of “listening to and supporting” customers. She said Yahoo will be increasing its investment in customer care to support that effort.


As for the new management structure, Bartz said she’s made changes that eliminate the “notorious silos” at the company that will allow it to make speedier decisions.

One of the key changes is the previously separate Tech and Products Groups are now a single organization, led by Ari Balogh, executive VP of Products and chief technology officer. He’ll report directly to Bartz.

The changes didn’t stop there. Yahoo (NASDAQ: YHOO) made a surprise filing with the Securities and Exchange Commission (SEC) today that its Chief Financial Officer, Blake Jorgensen, will resign.

The one-paragraph filing noted that Jorgensen will continue as CFO during a transitional period while Yahoo seeks a replacement.

News of the planned departure comes amid a wider reshuffling this week that saw the head of Yahoo’s news division resign, as well as the departure of the executive leading the company’s mobile group.

The shake up comes at a pivotal time for Yahoo, still reeling from its failure to accept a $45 billion buyout offer from Microsoft last year and the collapse of a proposed partnership with Google (NASDAQ: GOOG) that promised to bring the company hundreds of millions of dollars in additional revenue.

Yahoo is still among the most trafficked sites on the Internet, but continues to slip behind search leader Google in market share. Yahoo’s also missed opportunities in social networking now dominated by the likes of Facebook and MySpace.

Do you think I’m sexy?


“Reorgs are generally not sexy announcements, but what this one tells us is that the Yahoo board and everyone else associated with the company is quite happy to turn over the reins to Carol Bartz and let her do things her way,” Gartner analyst Allen Weiner told InternetNews.com.


Weiner said the new structure is closer to what Bartz was used to while running Autodesk where there’s a tight reporting structure of key people with a lot of accountability.

“It should lead to better communication both internally and externally and allow Yahoo to run more efficiently,” said Weiner. “It’s very basic management accountability, but Yahoo hasn’t had that.”

Who’s the boss?


Weiner said he heard from certain Yahoo employees that Bartz was appalled to find no one at the company was in charge of customer advocacy.


“It meant no one was in charge of talking to consumers and keeping an eye on the marketplace,” said Weiner. “And we can easily come up with a list of what Yahoo missed because of that, including social media, new search services and blogging.”


Weiner said the real test of the reorg will be what Yahoo delivers. “Let’s see something new, not a redo of things they’ve already announced. Show me something exciting.”


Analyst Tim Bajarin said the changes were long overdue.


“So much of how Yahoo was run had to do with multiple groups with multiple managers and the actual chain of command and lines of responsibilities were convoluted,” Bajarin, president of Creative Strategies, told InternetNews.com.


“Bartz has fundamentally reined in the chain of command and established a much cleaner decision making process. I look at this as all positive for the company.”


Bajarin thinks there may soon be other announcements as Yahoo further refines its focus on businesses it leads or has the best chance to succeed in and jettisons non-performers.

Some wags had criticized the Bartz appointment when she was named to step into the CEO role, saying her background as CEO of a traditional software firm (Autodesk) didn’t give her the experience to act quickly enough in the fast-paced, and far more competitive Internet world.

Critics are staying silent, for now.

Bartz also promised that under her leadership, Yahoo would be more aggressive in promoting its brand.

“In the past few years, we haven’t been as clear in showing the world what the Yahoo brand stands for,” Bartz wrote. “Were going to change that. Look for this company’s brand to kick ass again.”

Yahoo shares were up five percent to $13.11 following the announcement.

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