Yahoo’s Bartz Seeks To Rebrand, Clean House

The company’s new chief executive Carol Bartz handed CFO Blake Jorgensen a cardboard box on Thursday in a broad, if expected, reorganization plan.

Last Updated: March 2, 2009 @ 7:14 PM

In a major shake-up at her company on Thursday, Yahoo’s new CEO Carol Bartz suggested she knows what is ailing this online behemoth.

 

In a post on the company’s Yodel Anecdotal blog she wrote: “Mention Yahoo practically anywhere in the world, and people yodel. But in the past few years, we haven’t been as clear in showing the world what the Yahoo brand stands for.”

 

Putting strong people in marketing to develop brand identity was the main focus in the broad, if expected, reorganization plan. CFO Blake Jorgensen was handed a cardboard box on Thursday — just a few days after he suggested that Yahoo wasn’t opposed to a partnership with Microsoft over the search-engine property.

 

Two others at the Internet company, chief technology officer Ari Balogh and the company’s top U.S. ad exec Hilary Schneider, were given expanded duties.

 

Bartz also created two new jobs and filled them: Elisa Steel from NetApp as chief marketing officer and Yahoo corporate strategist Joel Jones as chief of staff.

 

In the job just six weeks, Bartz didn’t stated specifics about how the new team will affect Yahoo’s fortunes, which have been declining over the last several years and created shareholder frustration over her predecessor Jerry Yang’s rejection of a merger with Microsoft last year.

 

But she wrote on the blog, "I’m singularly focused on providing you with awesome products. Period."

 

"People here have impressed the hell out of me," she continued. "They’re smart, dedicated, passionate, driven, and really nice. There’s so much great energy and frankly lots of optimism. But there’s also plenty that has bogged this company down. For starters, you’d be amazed at how complicated some things are here."

 

Complicated, indeed. Complaints about the management structure have been rife, even as the company has gone through successive layoffs. The company is organized in a “matrix” pattern — horizontally as well as vertically — so employees belong to two groups, which was created to encourage conversation between groups but has only created confusion.

 

Bartz needs to create a more top-down management style, analysts say, to tame this beast.

 

The company also needs to figure out how to make money on some of its popular offerings, like social networking, video and photo-sharing Web offerings, and Yahoo mail.

 

It has been tough going for Yahoo over the last few years. Co-founder Yang — who was dumped after a shareholder revolt and whom Bartz replaced — and former movie studio honcho Terry Semel failed in their efforts after massive reorganizations.

 

The company’s stock has tanked and Google has handily replaced it as top dog in the search-engine world.

 

There are a few bright spots. The company’s share of the search-engine market has increased for five months in a row, while Google’s has dropped a half-point. And its stock shares rose 50 cents, or 4 %, to close Thursday at $12.98 on the news of the reorganization.

 

Under the shake-up, tech and product groups will be splintered off from the content groups and combined to create a single organization called Products, to be led by Balogh, a company spokesman said. Jeff Dossett, a senior vice president at the company since November, will remain in charge of content, editorial and programming.

 

As a Yahoo! spokesman put it, the goal would be to enable "extraordinary consumer experiences tied to compelling advertiser and publisher offerings."

 

Steele will oversee the global marketing strategy, and Schneider’s role will expand to include not just the U.S. but Canada and Mexico. Mobile, the spokesman said, will "continue to be a key priority," with David Ko heading the business. In addition, Bartz has created a new customer service division to better deal with complaints from users and advertisers. The new structure is designed to last two to four years.

 

Jorgensen will remain CFO until Bartz can find a replacement.