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Update 1 p.m. PDT: I added further details about the new organization.

Yahoo, under intense pressure, reorganized its upper management Thursday in a plan designed to improve its products, underlying technology, and operational execution, the company said.

Ash Patel will now report to Yahoo President Susan Decker.

(Credit: Stephen Shankland/CNET News.com)

The new structure leaves Chief Executive Jerry Yang and President Susan Decker at the top of the org chart. As expected, Ash Patel and Hilary Schneider will report to Decker, with Patel leading a new audience products division, and Schneider in charge of go-to-market operations for the United States region.

In addition, a third, as-yet-undetermined executive will report to Decker. That executive will run an "insights strategy team," with responsibilities for centralizing and running a Yahoo-wide strategy regarding use of data and analysis. The new executive will be named in coming weeks, Yahoo said Thursday.

The company also is forming some new groups within its technology organization. One, the audience technology group, will be led by Venkat Panchapakesan. Another group, whose leader is yet to be announced, will focus on cloud computing and data infrastructure.

Yahoo underwent an executive exodus in the last two weeks, losing three executive vice presidents, two senior vice presidents, and others. It's not clear to what extent those departures were the cause or the result of the reorganization plan, but Decker indicated in a statement that the reorganization has been under way for months.

"The changes we're making today will help deliver superior global products for users and enable faster and better decision-making," Decker said in a statement. "This is a logical next step in light of our success last year in moving to a more centralized approach to developing world-class marketing products.

"We have planned these changes deliberately over the past several months to clarify responsibilities and to capitalize on the scale advantages while allowing for fine-tuning to meet local market needs," Decker said.

Apparently at least some of the executive changes were involuntary.

"Some of the attrition we had was voluntary, and others were decisions we made because we wanted to take the company in a new direction with leadership," said Scott Dietzen in an interview. He joined Yahoo through its 2007 acquisition of online e-mail provider Zimbra and now also runs Yahoo Mail and Yahoo Messenger.

Yahoo has been suffering punishing pressure. In addition to steady business pressure from Google, it's been trying to fend off an unwelcome Microsoft takeover attempt, hammer out a narrower Microsoft partnership, fight a proxy battle with investor Carl Icahn, and begin a deal under which rival Google will supply Yahoo with search ads.

So it's no surprise there's major change. In fact, it's a safe bet there will be more major changes soon.

In the new order, Patel will oversee several consumer products available worldwide. Among those reporting directly to him is Dietzen, who now also runs Yahoo Mail and Yahoo Messenger. Another is Tapan Bhat, who ran Yahoo properties including Buzz, My Yahoo, and the main Yahoo.com page, and who under the new structure also runs Flickr and Yahoo Groups.

Patel's new area previously had been run by Jeff Weiner, who left Yahoo for a stint supporting venture capitalist work. Brad Garlinghouse, who's leaving this summer, had run the new work moving to Dietzen and Bhat.

Hilary Schneider

(Credit: Stephen Shankland/CNET News.com)

Schneider and her peers will have the profit-and-loss responsibilities, though.

Yahoo already had executives in charge of other regions: Toby Coppel for Europe, Rose Tsou for Asia, and Keith Nilsson for emerging markets. They and Schneider are in charge of signing up advertisers, cutting business deals, and working with Yahoo partners.

Meanwhile, Chief Technology Officer Ari Balogh, who still reports to Yang, is in charge of building and running Yahoo's computing infrastructure.

Balogh's audience technology group supports Patel's consumer products, with tight ties to corresponding product managers within Patel's group. And his cloud computing group initially will focus on providing internal services to the company--though that could change over time, he said in an interview.

"The primary focus is internal. But much like Amazon and Google, when you have something at scale and integrated, there are opportunities to offer services," Balogh said. "Based on some innovations, we may be able to leapfrog."

Reporting to Balogh in the search domain are David Ku, leading the advertising technology group; Prabhakar Raghavan, leading search strategy; and Tuoc Luong, leading search products on an interim basis, Yahoo said.

It looks like Patrick Pichette, Google's new chief financial officer, will be rewarded for his new job with up to $2.125 million after the first year if he earns his full bonus.

Patrick Pichette

(Credit: Bell Canada)

According to his employment offer letter, filed with the Securities and Exchange Commission, Pichette will receive a salary of $450,000 and an annual bonus up to one and half times that amount.

Pichette also gets a signing bonus of $500,000 and another cash bonus of $500,000 after 6 months at the search and advertising giant--though he must pay a prorated amount back if he decides to leave within a year. However, if Google terminates his job within the first 6 months, he'll get the cash bonus right away.

Stock options also are a part of the package. He'll get an option to 11,112 shares of Class A common stock, vesting over a four-year period. He'll also get 5,556 "Google stock units," vesting over a four-year period. At the end of that, the units convert to Google Class A shares.

He'll also get 910 Google stock units that will vest in 6 months and another 910 that vest in 12 months. They also convert into Class A shares.

Pichette, who had been president of operations at Bell Canada, starts at Google August 1 and will formally become CFO on August 12, Google said Wednesday.

Voluntarily or not, it looks like Yahoo will be getting a lot less top-heavy.

The pioneering but troubled Internet company is headed for a reorganization that, combined with an exodus of top Yahoo executives, will in all likelihood put power in dramatically fewer hands.

A lean management structure can be good for building a nimble, responsive organization. The problem with that idea at Yahoo is that the company is losing many of the executives who have control over day-to-day operations.

Ash Patel

(Credit: Stephen Shankland/CNET News.com)

And in some cases, the departures spread multiple steps down the hierarchy, depriving Yahoo of talent to promote and of expertise to train any new arrivals. Major turnover on this scale can turn succession planning into improv theater.

It appears the executive departures and an imminent reorganization are inextricably linked. From our discussions with Yahoo insiders and people familiar with the matter, it appears some executives want to leave, which means some reorganization is inevitable, while others aren't happy with just how that reorg appears to be shaking out.

To recap our and others' coverage, here's where Yahoo's upper echelon appears headed. First, the exodus:

Last week, two executive vice presidents--Jeff Weiner of the network group, and Usama Fayyad of research and computing infrastructure--said they'd be leaving. A third EVP, Qi Lu, in charge of search and monetization, joined the list this week. Two senior vice presidents also are departing, Brad Garlinghouse of communication and communities, and Vish Makhijani of search.

Second, what comes next? The reorg, as we reported Thursday. Some details on the possibilities have emerged. President Sue Decker is leading the revamp, according to the Wall Street Journal and others.

Patel, Schneider ascendant
Ash Patel--one of the company's earliest engineers and a man who still enjoys talking with programmers--looks to be ascendant overall by leading a new Yahoo products group. That would include areas such as search, Yahoo Messenger, Flickr, and Yahoo Mail.

Currently, Patel is EVP of platforms and infrastructure. That may sound like a behind-the-scenes infrastructure job, but a big part of the company's turnaround plan is the Yahoo Open Strategy, a plan to expose Yahoo's inner workings to outside programmers, and that's Patel's domain.

But should an engineer run all of the products group? Kara Swisher at AllThingsD believes the prospect of reporting to Patel is what was behind the Garlinghouse and Makhijani disgruntlement.

We're also hearing word of a regional organization for other areas, and Swisher reports that Hilary Schneider will oversee the U.S. operations involving advertising and media. She's currently EVP of global partner solutions, where she signs up display advertisers among other things. In the new order, she'll be Patel's peer and will report to Decker.

As for the other regions, Toby Coppel will run Europe, Rose Tsou will run Asia, and Keith Nilsson will run emerging markets, Swisher said.

CTO Ari Balogh will absorb some of Lu's engineering team, Swisher also said. One source we spoke to wasn't optimistic about that arena, believing that Yahoo needs a technology leader who's a young Turk rather than someone from the old guard--VeriSign in Balogh's case.

Hilary Schneider

(Credit: Stephen Shankland/CNET News.com)

A fresh start?
It's apparent from assorted insiders that there's worry about Yahoo brain drain.

But would that necessarily be a bad thing?

Yahoo remains a powerful Internet property, but much of the initiative has shifted to Google when it comes to online innovation. Google found a way to make search ads immensely profitable, is expanding aggressively into many traditional portal activities such as e-mail, and is pushing cloud computing technology with Google Apps.

So, for all the current executives' accomplishments, Yahoo has yet to match Google's overall ascent. Perhaps it's a good time for fresh faces. Corporate turmoil, like war, can quickly promote a captain into a colonel.

Freshness will go only so far, though: the two at the top, CEO Jerry Yang and Decker, are committed to Yahoo "for the long haul," I hear.

I'm not convinced the pair's abilities are in a dramatically different league from most CEOs, but they are suffering under an unusually intense spotlight. Yahoo's bruising battle with Microsoft, replaced now with a bruising battle with billionaire activist investor Carl Icahn, exposed Yahoo vulnerabilities and simultaneously gave shareholders a taste of Yahoo stock above $29.

Even though Icahn was trying to push the now seemingly doomed Microsoft acquisition, he hasn't gone away. He's expected to propose an alternative board of directors soon in anticipation of the company's August 1 shareholder meeting.

CNET News.com Editor in Chief Dan Farber believes Wall Street will effectively oust Yang and that Decker is the likely successor. I'm not willing to make that pronouncement yet, but certainly one challenge at the company, putting several individually strong properties together into a coherent whole, is a task for high-level management.

Wall Street seems mildly pessimistic about the changes so far, though not as much as when the possibility of a Yahoo-Microsoft partnership fell off the table. The company's stock gradually slid over the week from about $23 to about $22. What it does after the reorg and Carl Icahn could determine Yang's fate.

Joshua Schachter, the founder of the Delicious social-bookmarking service Yahoo acquired in 2005, is joining the executive exodus from the Internet giant.

"Just time to move on, I think," Schachter said in an e-mail, but didn't share further details.

The Internet company also confirmed on Thursday evening that Schachter will leave at the end of June; TechCrunch reported it earlier.

"Joshua Schachter has contributed greatly to Delicious' success and Yahoo's success in our social search efforts...Yahoo wishes him well in his next endeavor," the company said in a statement.

Yahoo headquarters in Sunnyvale, Calif.

(Credit: Stephen Shankland/CNET News.com)

He's one of an ever-longer list of recent Yahoo departures, which also includes the following just from recent days:

Jeff Weiner, executive vice president of the network division; Qi Lu, executive vice president of engineering for search and advertising technology; Usama Fayyad, chief data officer and executive vice president of research and strategic data solutions; Brad Garlinghouse, senior vice president of communications and community; Vish Makhijani, senior vice president of search; Stewart Butterfield and Caterina Fake, the husband-and-wife co-founders of Flickr; Jeremy Zawodny, an open-source developer and evangelist of what's now become the Yahoo Open Strategy; and Jason Zajac, who has been general manager of social media, head of finance for the audience division, and vice president of corporate strategy.

Yahoo believes there are plenty other folks to keep Delicious healthy: "His departure leaves behind a seasoned team that will take Delicious to the next level, as well as carry forward the mission of Delicious to continue to be the shared memory of the web and the world's largest social bookmarking site."

Delicious (aka del.icio.us) lets people save Web site bookmarks on a central server, adding tags and text to describe them. People also can subscribe to feeds showing others' bookmark activity, whence the term social bookmarking.

Schachter started the project in response to challenges he encountered sharing bookmarks at the Memepool site he helped found and run.

Yahoo released a delicious plug-in for Internet Explorer on Thursday, but it's had a Firefox plug-in for years and can be used with a more ordinary browser interface, too.

Qi Lu

(Credit: Yahoo)

The executive parade from Yahoo could well be getting a lot longer.

Three more executives are leaving the company: Qi Lu, executive vice president of engineering for search and advertising technology; Brad Garlinghouse, senior vice president of communications and community; and Vish Makhijani, senior vice president of search, TechCrunch reported Thursday.

Yahoo didn't immediately respond to requests for comment.

Update 12:17 p.m. PDT: Lu, who leads search and monetization work at Yahoo, can't be in an easy position. Yahoo just announced a major agreement under which Google--Yahoo's top rival--will supply its own search ads next to Yahoo's search results.

Garlinghouse is best known outside Yahoo for his "Peanut Butter Manifesto", in which he complained, "We want to do everything and be everything--to everyone...The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular."

The pressure has to be strong for Makhijani, too. Yahoo is interested in search, but in the last year, search queries performed at Yahoo in May declined 13.8 percent to 1.33 billion while Google's increased to 4.65 billion, according to statistics released Thursday by Nielsen Online. And third-place Microsoft, whose search queries increased 72 percent to 1.04 billion, is trying to poach Yahoo search employees.

Yahoo already lost several high-level executives in the last week:

Brad Garlinghouse

(Credit: Stephen Shankland/CNET News.com)

• Jeff Weiner, executive vice president of the network division.

• Stewart Butterfield and Caterina Fake, the husband-and-wife co-founders of Flickr.

• Usama Fayyad, chief data officer and executive vice president of research and strategic data solutions.

• Jeremy Zawodny, an evangelist of what's now become the Yahoo Open Strategy.

• Jason Zajac, who has been general manager of social media, head of finance for the audience division, and vice president of corporate strategy.

Update 1:17 p.m. PDT: A source familiar with Yahoo's situation confirmed that Lu is in fact leaving the company.

Update 3:40 p.m. PDT: Yahoo offered a statement, but it's only general:

"We have a deep and talented management team across all areas of the company. Our successful implementation of our core strategies and the timely rollout of key products this year testifies to the effectiveness of our team, and we continue to recruit outstanding talent. Yahoo continues to be a leader in our industry and remains a unique, exciting, and important place to work even as we experience the attrition that's to be expected in the Internet industry."

I have to wonder: Is this the level at which attrition is "expected"?

Update 5:07 p.m. PDT: I've confirmed all three departures from multiple sources familiar with the situation.

And there's more: Yahoo plans a major reorganization, potentially to be announced as soon as next week, one source said. This change will be of much bigger magnitude than the rejiggerings of recent quarters.

"It's definitely not a shuffle," the source said. But while some have called for the ouster of Chief Executive Jerry Yang, the change won't affect him or President Susan Decker, apparently. And it likely won't involve layoffs.

One factor contributing to some of the executive departures is dissatisfaction with how they'd end up after the reorganization, the source said. Another is what amounted to the choice of recommitting to Yahoo or moving on.

But one source within the company had a more skeptical view of the reorganization, believing it a forced reaction to executive departures rather than the cause.

"You can see that Jerry does not have the support of the leadership inside Yahoo," the source said.

Update 6:34 p.m. PDT: The Wall Street Journal reported Thursday that the reorganization will centralize product groups into a central product organization.

Stewart Butterfield and Caterina Fake, the husband-and-wife co-founders of the Flickr photo-sharing site Yahoo acquired in 2005, are leaving the Internet giant.

Fake's last day was June 13, and Butterfield's will be July 12, Yahoo spokeswoman Terrell Karlsten said. "Obviously Stewart and Caterina have made tremendous contributions to Yahoo. We appreciate all their work and wish them well," she said.

The pair join a small but notable parade of Yahoo departures. Among others in the last week are Jeff Weiner, executive vice president of the network division; Usama Fayyad, chief data officer; and Jeremy Zawodny, a top programmer and advocate of what's now become the Yahoo Open Strategy.

TechCrunch reported the departures Tuesday.

Flickr is one of the major "starting points" Yahoo is promoting as an effort to revitalize its Web site, moving to an approach that emphasizes top properties. Flickr is a major force on the Internet, housing not just vast numbers of photos but also active groups devoted to discussing subjects such as new camera technology and photography techniques and to rating each other's images.

Update 4:27 p.m. PDT: Yahoo said the departures weren't the result of a reorganization or other internal action. "People are making personal decisions," said spokeswoman Jennifer Stephens Acree.

Update 4:42 p.m. PDT: Kakul Srivastava, who has been general manager for about a month will continue in that role, Karlsten added.

Meanwhile, the Flickr community is discussing the change--at Flickr, naturally.

Jeff Weiner, executive vice president of Yahoo's network division

(Credit: Stephen Shankland/CNET News.com)

Jeff Weiner, a top Yahoo executive who announced his departure from the company last week, is indeed joining two venture capital firms.

Accel Partnerse and Greylock Partners both announced Monday that Weiner is joining as "executive in residence."

"Weiner will advise the leadership teams of existing Accel and Greylock consumer technology portfolio companies, and will also work closely with the firm's partners to evaluate new investment opportunities," the firms said.

Weiner was executive vice president of Yahoo's network division, overseeing many of the Internet company's most important products.

According to a memo from Yahoo President Susan Decker, reported on TechCrunch, "On an interim basis, Jeff's team will report to me as we consider how to best move the organization forward."

Jeff Weiner, executive vice president of Yahoo's Network division

(Credit: Stephen Shankland/CNET News.com)

Jeff Weiner, executive vice president of Yahoo's Network division and leader of many of the company's core products, is leaving the company, CNET News.com has confirmed.

A source familiar with the executive's plans said he is departing, a move reported earlier Thursday by Kara Swisher at AllThingsD.

Swisher also said Weiner will become an entrepreneur in residence at two venture capital firms, Accel Partners and Greylock Partners, neither of which immediately responded to requests for comment.

Weiner joined the company in 2001 during the reign of former Chief Executive Terry Semel, who left last year and was replaced by co-founder Jerry Yang. Weiner was in charge of a multitude of products, including Web search, news, finance, and the Yahoo front page.

Yahoo declined to comment for this report.

Last week, my wife's Dell Inspiron decided to stop printing to our wireless HP all-in-one. It was apparently a problem with the spooler, whatever that is. At that point, I had two choices: leave it alone and hope for a miracle, or fix it and perform some upgrades I'd been putting off.

Let me back up and explain something. I hate working on my wife's computer. Whatever I do inevitably screws something up, it takes way longer than I would like, and well, let's just say, my wife is impatient when it comes to technology.

It's OK for a doctor or dentist to poke and prod her, but when I poke or prod her computer, she acts as if I do it for the pure sadistic enjoyment of screwing up her peaceful existence. ... Read more