Breaking News: Yahoo
The writing was on the wall the moment Yahoo hired Hillary Schneider. The media executive from the former Knight Ridder was brought on to run Yahoo's new Marketplace initiative. But she wasn't to report to CEO Terry Semel, or even COO Dan Rosensweig. Nope, she would report to CFO Sue Decker.
The message was clear: Decker's star was on the rise. And the sun was setting on Rosensweig's Yahoo career.
Rumors of a sweeping reorganization have been ripe for weeks, confirmed late Tuesday by an
all-hands webcast that structures the company into three new divisions.
I have also been told that Lloyd Braun, head of Yahoo's media and entertainment group, was asked to leave the company Tuesday morning after Yahoo first suggested he take a lesser role on the company's chain of command. Same goes for SVP John Marcom, who ran Yahoo's International Business operations.
Ever since the so-called Peanut Butter memo was leaked, reorganization rumors have been flying: that Yahoo was in need of sweeping changes, that 20 percent of the workforce would be cut, and that Semel was on his way out.
Reorganization? Yes. Sweeping? No. Semel told his troops at a recent all-hands meeting that he was not the kind of guy to cut and run. That he had two years left before retirement and that he wouldn't be resigning. So, no big job cuts, and still the three-headed monster under Semel that some insiders have complained to me about has led to glacial this adoption of strategic change at the company.
Rosensweig goes, effective in March. But Decker, widely respected inside the company by rank and file (she's shown up at company-wide meetings riding a Harley, complete with leather chaps!), and outside by the Street and institutional investors, will now run a new group called Advertisers and Publishers, the company's bread and butter division. If the stock takes a hit, it's because Decker will leave her CFO position and a search is on for her replacement.
Farzad Nazem, "Zad," will continue to run the Technology Group as CTO, and a search is on for someone to lead the newly established "Audience Group."
Yes, it's a streamlined structure, but it's still going to be three top execs reporting to Semel, similar to the Decker, Nazem, Rosensweig era that ends today with the latter's departure.
So why now? Yahoo's shares were up 54 cents Tuesday, but they're down better than 30 percent this year. Just as rival Google hit $500 a share for the first time, enjoying its $153 billion market cap, second in the Silicon Valley on to Cisco Systems. Yes, ahead of venerable HP and Intel by billions.
Yahoo has been mired in indecision while nimble Google out-innovates the company the way Tiger Woods used to out-shoot opponents. Easily and with style.
This move is not from desperation, but it's close. Semel likely fought against a reduction in responsibility, and he's known as fiercely loyal to his troops. But after something like this, if something doesn't change -- and change quickly, Yahoo will be forced to take far more Draconian actions, including that layoff, and it'll not be Semel making those decisions. The question, unanswered today, is how long the board has given Semel to get this fading darling of the internet back into form.
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