Yahoo Restructuring, Google Questions Arise? 1

Yesterday Yahoo released information about the company’s restructuring efforts. The biggest news is that they will be focused on “…key customer segments — audiences, advertisers and publishers — and more effectively leverage Yahoo!’s significant strengths to capture future opportunities for growth.” (quoted text taken from press release).

It seems that Yahoo! will be re-organizing into a leaner and meaner organization, looking to take advantage of it’s already extremely large user base. According to the Press Release they will be re-structure into three main operational groups: Audience, Advertiser-Publisher, and Technology. This means that the new Yahoo structure will get rid of the Bureaucratic mess that is currently there and will put more accountability and quicker decision making in place.

COO Dan Rosensweig will be leaving Yahoo effective the end of March 2007. He will apparently stay on to ensure that there is a smooth transition. CFO Susan Decker will also be leaving the company, but will be staying on-board in the interim to help find a replacement. According to the press release, these positions, including human resources and corporate development will report to Terry Semel.

Semel said, “We’re putting the right people in the right places to execute our focused growth strategy. Yahoo! has an extraordinarily skilled and experienced group of senior executives, and we’re adding outside senior talent to this already strong team. Our new structure gives us the opportunity to draw more fully on Yahoo!’s deep bench of talent, both at the new group level and down through the organization, while also increasing accountability, reducing bottlenecks and speeding decision-making. We’ll also continue to drive sustained innovation by recruiting, developing and retaining the best talent in our industry.”

So, what does this all mean?! Personally I think this is a great move by Yahoo! to try to take advantage of the already massive user base. Being that accountability and speed decision making are the top priorities, it will give them a chance to really succeed at iterating on projects and initiatives within the organization.

In my mind this brings up a great point that I think is somewhat untouched. Where does this leave Google in a year, 2 years or even more down the road? Could Google be making the same mistakes that Yahoo! has made, has it’s growth turned it into an organization that is unable to iterate, or is that around the corner? It is possible that Google has already addressed these issues and does not have the issues that Yahoo! has and might never have the same issues.

The question still remains in my eyes though that Google is an organization with only one source of revenue, Adsense/Adwords. Now, obviously it is massively profitable, that is not the question. The question arises whether or not Google can sustain growth and compete in the long-term with their advertising platforms. Especially with the continuous click-fraud cases, talks, arguments, and/or studies. Will any of this catch up to Google and will the size of the organization be unable to move forward like we have seen by the likes of Yahoo!?
We can’t answer any of these questions right now, that is pretty obvious, but knowing where people stand on these issues are important for our industries, especially Search Engine Marketing. I’d love to view some opinions to find out where people stand on where Google & Yahoo! will be in the near and distant future and how it will effect our industry.

One comment on “Yahoo Restructuring, Google Questions Arise?

  1. Reply jimbo jansen Dec 7, 2006 12:40 am

    Clearly Google has problems creating and developing online communities. They have mothballed the Answers service. They recently bought YouTube which is (presumably) a poor implementation of the Google Video service. But it has a community. Their most popular product, search, has zero switching costs. The stickiest aspect of Google at the moment is Gmail, but that could be bested by another upstart competitor quite easily.

    Google is in a precarious position.

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