Yahoo to Reorganize: CFO Decker Reassigned; Braun, Rosensweig Out
It has finally come, though the timing might be awkward: Yahoo announced late Tuesday night a sweeping corporate reorganization, one effect of which will be the unceremonious dumping of its once ambitious Media Group project, and the former head of ABC Television along with it.
UPDATED 10:00 am December 6, 2006: MediaWeek reported late yesterday, just prior to the news of Yahoo's reorganization, that it is cutting ties to one of its media partners, Current TV. The two companies had been working together since March on building a YouTube-like video sharing destination, though outgoing Media Group head Lloyd Braun was personally involved with that project. A Yahoo statement to MediaWeek indicates that Current TV is expected to continue pursuing its video portal on its own.
There were rumblings ever since the widespread dissemination of Yahoo SVP Brad Garlinghouse's now world-famous "Peanut Butter Memo" that a reorganization was under way at the number two search provider. But Tuesday night – not Friday night, where re-org news is often relegated to avoid a stock market meltdown – Yahoo announced it's essentially scrapping its existing corporate structure.
The move places CFO Susan Decker, who was perhaps coincidentally profiled by Forbes magazine just last month as "Yahoo's Rising Star," will take the helm of a newly created Advertiser & Publisher Group, "with the goal of driving more value for more advertisers and publishers than any other company," according to Yahoo's late corporate statement. The ink is so wet on this statement – or perhaps it's peanut butter – that the title of this position has yet to be determined. However, judging from the praise the statement gives Decker, one can assume this to be a promotion.
The reorganization will also create an Audience Group, described as "focused on building the largest and most valuable audiences and relationships on and off the Yahoo! network, creating more unique, tailored and engaging experiences for Yahoo!'s valuable users." A head for this division has not been named; one would think Garlinghouse would be a reasonable candidate, although if that were the case, perhaps he should already have been chosen.
The Technology Group will apparently be given a more semi-autonomous role within the company, though it is described as also providing support for the organization. The new group will "concentrate key engineering talent and shift investment towards the development of high-impact, scalable, global platforms and infrastructures to help capture the most significant long-term growth opportunities." Farzad Nazem, veteran CTO, will continue to lead that team.
Leaving the company for certain at the end of March will be Dan Rosensweig, its chief operating officer, for reasons explained as "to ensure a smooth transition." Yahoo CEO Terry Semel thanked Rosensweig thanked him and sent him on his way.
It seems simple enough: A newer, simpler Yahoo will concentrate on developing audiences, developing relationships with clients, and developing technology. But if you've followed the recent history of the company, you already know what's missing here: any mention of a "Media Group."
In November 2004, during its last corporate reorganization, Yahoo hired ABC Television chairman Lloyd Braun to head an ambitious media group project that would have had the search provider conceivably producing and distributing original video productions online. Just last January, Braun had reportedly struck an agreement with reality show producer Mark Burnett (Survivor, The Apprentice) to try to create a running reality contest in cooperation with his old employer.
Late this evening, Reuters confirmed that Braun was leaving the company, without much fanfare and with very few produced programs to show for his efforts. "I am proud to have led this team of extraordinary professionals," Reuters quotes Braun as saying this evening, "and I wish Yahoo the greatest success in the future."
Braun's falling star became evident last February after a speech he made to an entertainment and information systems conference. There, an eyewitness said he began rambling on a topic which was not in the script, and then afterward entered into a public argument with the conference's lead organizer, in front of his own subordinates at a Yahoo-dedicated party.
USA Today reporter and blogger Kevin Maney, who also attended, said Braun was "speaking while exhausted, unprepared and seemingly clueless about the audience's sophistication level. He rambled on, for instance, about how people want to 'passively' watch TV and 'actively' use the Internet and never the twain shall meet - a conversation the tech world had a decade ago."
Insiders said Braun's division was frequently wrestling with that of the former Search and Marketplace Group, previously headed by senior vice president Jeff Wiener. Today, with the purview of that group apparently being divided in two, and at least one half assigned to Susan Decker, it isn't clear whether Wiener will head the other division, or whether he'll be around for long either. No statement from Wiener's office was made this evening, nor was he mentioned in tonight's statement.
Last October's Peanut Butter Memo painted a picture of a company afraid to admit to its own colleagues that it was afraid, and to explain what it was afraid of. "We are separated into silos that far too frequently don't talk to each other," Brad Garlinghouse wrote. "And when we do talk, it isn't to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics."
Tonight's reorganization could very well put an end to at least some of what insiders report to be infighting, by effectively putting an end to the divisions that were fighting with one another to begin with. This may only be the first stage in a complete overhaul, at the end of which, Yahoo may end up looking more like it did in 1999. Downsizing could be next. It seems there isn't much difference between new media and old media after all these days.