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Yahoo Reveals Reorganization Plan For More Customer Focus

Yahoo Reveals Reorganization Plan For More Customer Focus
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A week after announcing the layoff of 2000 employees, Internet giant Yahoo, Inc. (YHOO: Quote) has Tuesday revealed the much anticipated corporate reorganization plan. In a memo to employees, CEO Scott Thompson said Yahoo will now focus on three main groups - consumer, regions and technology, effective May 1, as well as renew its focus on commerce rather than the "traditional e-commerce."

"As we look to Yahoo!'s future, all of us must remember to always keep our customers first in everything we do. Ultimately, only our customers will decide whether we win or lose in the market," Thompson wrote in the memo.

The reorganization will see Yahoo ready itself to respond faster to customer needs and be more competitive in winning areas. Yahoo currently handles nearly 700 million users and thousands of advertisers on a regular basis.

Thompson said, "we must focus all we do on the users who trust us to give them personalized content and communications, and the advertisers who want to connect with our users."

He added that a new leadership structure, organizing all its activities around customers, will also be in place after taking into account the layoffs, the largest in the company's 17-year history.

The consumer group will again encompass three units - media, connections and commerce, and regions group will target the emerging markets in Americas, Asia-Pacific, and Europe, the Middle East and Africa. Meanwhile, the technology group will be focused on the company's tech infrastructure such as advertising and "cloud" platforms.

Thompson noted that "each of the three groups will be charged with delivering the best customer experiences and have very clear accountability for getting results." The groups will be supported by the finance, legal, and human-resources departments, he added.

Thompson also said he will work closely with the new leaders over the next several weeks to ensure a smooth transition following Chief Product Officer Blake Irving's decision to leave the company.

"He has made a tremendous contribution to the advancement of Yahoo!'s product strategy and execution over the last two years and I know you will join me in wishing him all the best in the future," Thompson noted.

Irving, who worked earlier for Microsoft Inc. (MSFT), joined Yahoo! in 2010 when Carol Bartz was at the helm of the Internet firm. A major part of the layoffs that the company recently announced is said to be happening in his side of the business. He is reportedly opposed to many changes that Thompson has planned.

Among the major changes in the leadership structure, Penny Baldwin is named to serve as interim leader for the corporate marketing and communications teams as the search a new chief marketing officer is being initiated.

John Kremer has been appointed to lead a newly-created transformation team that will ensure full implementation of and accountability for the restructuring and related organizational changes.

Yahoo said last week it will layoff about 2,000 employees, or 14 percent of its global workforce, as it revamps itself into a slimmer company. The company added that it aims to be more profitable by focusing primarily on a "select group of core businesses."

The Internet giant, which offers most of its products free, requires more of ad revenues to boost its performance. Even though display advertising is a bright spot, the company is facing tough competition in search business from Google, Inc. (GOOG: Quote) and also from increasing popularity for social networking sites such as Facebook.

Yahoo continues to lose search market share to Google, and hasn't been able to increase revenues even as the Internet ad market expands by more than 20 percent annually.

As part of an ongoing strategic review process that started in early September after Carol Bartz was fired as CEO by Yahoo board, it named PayPal's President Scott Thompson to take over as the new CEO in early January. The current layoffs and the reorganization are part of a larger restructuring at Yahoo by Thompson.

YHOO closed Tuesday's regular trading session at $14.99, down $0.11 or 0.73% on a volume of 15.29 million shares. In the past 52-week period, the stock has been trading in a range of $11.09 to $18.84.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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