December 21, 2006 4:00 AM PST

A force for change at Yahoo

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In January, the woman many believe is the heir apparent to run Yahoo made a very public splash by bluntly saying she didn't expect her company to beat Google at the search game anytime soon.

"We would be very happy to maintain our market share," Susan Decker, Yahoo's chief financial officer, reportedly said. Decker's frank assessment caused major ripples at Yahoo's Sunnyvale, Calif., office. Some executives believed she had been misquoted. Two search vice presidents even posted a Yahoo corporate blog distancing Yahoo from Decker's comments and reaffirming the company's commitment to search.

As the year comes to a close, it's looking more and more like Decker may have the last word on what's right for Yahoo as she takes on a lead operational role in the suddenly wobbly Net company's future.

On December 5, Yahoo announced it was reorganizing into three areas; advertising, audience and technology, and Decker was named to head the ad group beginning January 1. At the same time, the company said it was losing some top executives, including Chief Operating Officer Dan Rosensweig and Lloyd Braun, head of Yahoo's media and entertainment group. The executive departures seem to continue. Former vice president of brand marketing Murray Gaylord just left for NYTimes.com, for example.

While no one inside Yahoo will come out and say it, the recent management shuffle has given Decker the opportunity to prove she has the management chops to take over for CEO Terry Semel, who some believe will give up his post within the next year. Yahoo declined comment for this article.

The changes put Decker squarely in charge of the area in which it needs to improve the most to keep pace with Google--perfecting Panama, the new advertising platform that executives and analysts expect will raise Yahoo's ad performance and revenues. So far, insiders say the ad platform is testing well.

Susan Decker Susan Decker

Another big challenge for Yahoo will be to clean up organizational redundancies and disconnects that were outlined in the so-called " Peanut Butter Manifesto." In one example of such issues, the music services Yahoo Music and Musicmatch--a paid music service that Yahoo acquired years ago--haven't historically been combined, creating competitive operations in the same company and potential overlaps in workforce.

In recent years, Yahoo's new media arm in Santa Monica, Calif., also created its own marketing group independent of the company's headquarter team, which could be another potential redundancy, according to onlookers.

Finally, Yahoo needs to play catch-up in one of the hottest areas of the Internet--video. Two years ago, Yahoo formed a new media group in Santa Monica under Braun--a Hollywood player who while chairman of ABC Entertainment Television had given the green light to hits like Lost--with the expectation that Yahoo would become an Internet media heavyweight.

But instead of churning out successes, Yahoo's ambitions were eclipsed by nimble upstarts like YouTube, which Google bought for $1.65 billion. Yahoo is currently scouting for a new executive to head up its Audience Group; that person will oversee search, media, communities and communications.

See more CNET content tagged:
Yahoo! Inc., Lloyd Braun, Santa Monica, CFO, vice president

6 comments

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Inaccurate
This statement is not accurate:
"In one example of such issues, the music services Yahoo Music and Musicmatch--a paid music service that Yahoo acquired years ago--haven't historically been under a central group's control, creating overlaps in workforce."

Yahoo! Music and MusicMatch have been managed by the same team since MusicMatch has been acquired. I know this because I am on that team.
Posted by hitsman (3 comments )
Reply Link Flag
Yahoo still does not get it
I once posted on this site about how I eagerly tried to sign up for Yahoo launchcast plus as was so appalled by the behavior of the software on my machine that I canceled the service within a day of having to use it.

Not long after my post I see this story basically saying that some of the winning design decisions I loved so much with Launchcast plus ended up in messenger: <a class="jive-link-external" href="http://news.cbsi.com/Yahoos+IM+update+A+Trojan+horse+of+surprises/2100-1038_3-6144286.html" target="_newWindow">http://news.cbsi.com/Yahoos+IM+update+A+Trojan+horse+of+surprises/2100-1038_3-6144286.html</a>

This only outlined that even as recently as 12/15/06 Yahoo is not thinking about the customer at all.

Now Yahoo is going to appoint their CFO to lead search because she has a good working relationship with wall street and might be healthy for the stock price?

This again reinforces my perspective that they are an investor-centric company, and not user-centric at all.

Her comments about Yahoo never catching Google on search are likely true, but her comments also hint that she likely has no intention of trying either.

By "focus on current users" she does not mean enhancing their experience, she means forcefully milking more from them like Yahoo messenger forcing all that is Yahoo on their PC's with or without user consent.

This behavior will grant her the short term numbers she is looking for on her next quarterly statement and improving tomorrows stock price, but it does little to sustain their long term market share and brand name.

Not that she would care anyway, if the investors cash out first they don't care, and as long as she gets get bonus and multi-million dollar severance package she does not care, she can just move on to the next company touting her impressive relationship with Wall Street and probably get a signing bonus to chace away their customers and railroad that company too.
Posted by Dachi (797 comments )
Reply Link Flag
Re: user-centric
&lt;This again reinforces my perspective that they are an investor-
centric company, and not user-centric at all.&gt;

In the long run, all companies serve the master who pays the
bills. In today's Internet, that is primarily investors and
advertisers. As long as consumers opt for a free ride, they will
get what they pay for.
Posted by timoteo21 (17 comments )
Link Flag
It wasn't "Suddenly Wobbly".
The shakeup was predictable one year ago.

Comparison of traffic for Yahoo, MSN, Google and Baidu. In general, the search engine market is probably approaching saturation and it appears to be breaking down into differentiated engines -

<a class="jive-link-external" href="http://www.realmeme.com/roller/page/realmeme?entry=search_engine_comparison" target="_newWindow">http://www.realmeme.com/roller/page/realmeme?entry=search_engine_comparison</a>
Posted by Broward Horne (88 comments )
Reply Link Flag
Yahoo Message Boards draw visitors
The recent cutback to support discussion on the Yahoo Message Boards has and will cost Yahoo dearly. Visitors were drawn to Yahoo and supported Yahoo for its freebies. The disappearance of the "Discuss" option has been the hot topic around many watercoolers since Dec 20th.
Posted by Des Alba (68 comments )
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