Carol Bartz Gets New Yahoo Org Chart Half Right

Yahoo's new CEO Carol Bartz hates leaks, and we love Yahoo org charts, so the fact that we've received her announcement of the new Yahoo corporate structure is some kind of harmonic convergence.

There's much to the good in this org chart. Ash Patel, a famously lazy old-time Yahoo mostly regarded for his time in the job, is nowhere to be seen in Yahoo's executive ranks, replaced by CTO Ari Balogh. He's still at Yahoo, but his new job is unclear. Hopefully he'll be out the door entirely soon. And CFO Blake Jorgensen, an ineffective hire made by former Yahoo president Sue Decker (he was her best man at her wedding), is also gone.

But there are too many holdovers. Michael Callahan, a general counsel who got founder Jerry Yang hauled in front of Congress and labeled a "moral pygmy" over Yahoo's outing of a Chinese dissident, whose own department generated a labor lawsuit by Yahoo's first black, female lawyer, and who blithely expressed optimism about a lucrative advertising deal with Google that antitrust cops end up shooting down, should not be holding his job. HR chief David Windley's faults are less public, but Yahoo insiders say they loathe him.

Finally, there's the new face Bartz has picked: Elisa Steele, Yahoo's latest chief marketing officer, who joines the company from NetApp. Like Bartz, Steele previously worked at Sun. For all the same reasons that people were dubious about Bartz's hire — she's a software and hardware saleswoman who's unfamiliar with Web products and online advertising — one might be skeptical of Steele's background. Instead of shoring up her weaknesses in those fields, Bartz has hired a clone.

For those who want to plow through Bartz's explanation of what that purple graphic means, here's her memo:

From: Carol Bartz
Reply-To: Carol Bartz
Date: Thu, 26 Feb 2009 09:02:49 -0800
To: "all-worldwide@yahoo-inc.com"
Subject: Our New Organization

Yahoos,

As I've gotten to know Yahoo! over the past several weeks, I've developed a
point of view on how our organization should be structured to set us up for
success.

Our goal is simple: to consistently deliver awesome consumer and advertiser
experiences, everywhere in the world we do business. Delivering great
customer experiences is everyone's job at Yahoo! – and each part of our
organization will have a clear role in making that happen every day.

The timing of this announcement is important. As soon as decisions were
made, I wanted you to know about them — even if that means we don't have
all the details nailed down yet. Yes, there's been a lot of speculation in
the media over the past few days … that's been a little frustrating, but I'm
not willing to speak publicly about decisions before they're final. Today,
they are — so I'll lay out our new organizational structure for you now.

I know you guys have reorg fatigue. Hang in there – our intention is to
leave this structure in place for two to four years. We'll continue to make
adjustments as needed, but we expect this core structure to stay put.

The structure outlined below will enable us to make big improvements in our
product quality and operational efficiency. Part of that is simplicity –
I'm frankly amazed at how complicated some things are here! We'll have much
clearer decision making and accountability. Product and regional teams will
share responsibility for revenue targets and expense management, but we'll
have one P&L, for which I'm accountable.

We will also be in a better position to really listen to and understand our
customers -both consumers and advertisers. I think we've gotten into the
habit of focusing internally too much and we sometimes forget who we're here
to serve. You'll notice that our management structure puts a renewed focus
on the customer, with stronger feedback loops across the company… and they
all come through me.

Also, as you know, no organizational structure is a substitute for
collaboration, communication and trust. We'll all need to evolve our
behavior a bit – as teams and as individuals – to make this structure work
the way it's designed.

So here's the overview, with the roles that will report directly to me. As
you'll see, some of our leaders are still to be determined. I know you'll
want more detail than what's below – you can learn more on Backyard:
http://backyard.yahoo.com/ourorg .

Products: We've combined Tech and Product groups under one roof, led by Ari
Balogh as EVP Products & CTO. Ari's charter is to deliver global products
that enable extraordinary consumer and advertiser experiences. Ari's direct
reports now include one leader for each product group – we've taken care of
the "two in a box" problem.

One important note: The Connected Life team has been integrated into various
parts of the new organization. Our mobile strategy remains a key part of
Yahoo!'s focus going forward and all of our product groups will own mobile
innovations. After leading Connected Life for four years, Marco Boerries has
resigned from the company to spend more time with his family in Europe. We
thank Marco for his important contributions at Yahoo!.

Regions: There are now two: North America and International. As I've said
before, international growth is critical for Yahoo!, which has become too
reliant on its U.S. business over the years.

The regions deliver Yahoo!'s products, programming and services to
consumers, partners and advertisers in local markets. They will partner
closely with the newly formed Regional Solutions & Products group in Ari's
organization to help drive a significant shift in how Yahoo! develops
products for different geographies. The goal is to have global platforms on
which regional product offerings are based.

The North American region — comprised of the U.S. and Canada – is led by
Hilary Schneider. The leader of our International region, to be hired soon,
will be responsible for a cohesive Yahoo! global strategy and seizing our
international growth opportunities. Until we determine who'll lead the
International region, Rose Tsou (Asia), Rich Riley (Europe) and Keith
Nilsson (Emerging Markets) will continue to report to me.

Marketing: Elisa Steele will be joining Yahoo! as our Chief Marketing
Officer (CMO), effective March 23. Elisa joins us from NetApp where she was
SVP, Corporate Marketing. Previous to NetApp, she held executive positions
in marketing at Sun Microsystems. Elisa will oversee our global marketing
strategy and provide direction for our marketing function. She'll bring
together the various Yahoo! marketing teams that have been spread across the
company. Reporting into Elisa will be Brand Marketing, Audience Marketing,
Corporate Communications, Insights, Policy & Privacy, Community Affairs and
related central teams. I'm delighted to have Elisa joining the team.

Customer Advocacy: As I said, we can do much better in hearing the voice of
the customer across Yahoo!, and incorporating what we hear into all of our
work day-to-day. We have opened a search for a leader, who will oversee
Customer Care and Ad Operations globally with the goal of improving how we
support Yahoo!'s users and advertisers. In the interim, these teams will
continue to report to Hilary.

Service Engineering & Operations: This new team is responsible for
delivering common technology services at scale, including application
management and infrastructure. No matter how cool our products are, the
customer's experience won't be great unless our applications consistently
deliver. Note that we're bringing Service Engineering together as one group
because these engineers bring expertise that is best applied horizontally.
Leading this organization is David Dibble, who joined Yahoo! in December.
David's team also will be accountable for delivering more effective
corporate IT systems.

Corporate Functions: Blake Jorgensen will be leaving Yahoo! and I am
searching for a new CFO. Blake will remain through a transition with his
successor, and I want to thank Blake for all of his great contributions to
Yahoo! over the past two years. Mike Callahan will continue to lead our
Legal team, and David Windley leads our Human Resources function. Joel
Jones joins the team as my Chief of Staff.

So that's the high-level view. These changes are effective immediately, but
we've got more work to do in filling out the structure of each group. In
the short term, this transition will be challenging for many of our people.
My executive staff will be working with their organizations as quickly as
possible to create further clarity. For example, we'll need to recast
budgets and adjust work areas so we have the right people working
side-by-side.

I want to thank all of you who've shared your ideas and views with me since
I arrived. Several leaders across Yahoo! came together to design this new
structure – I've been very impressed with their dedication to the right
outcomes, particularly how they've embraced the need to eliminate the silos
that have been a drag on this organization for so long.

I think this organizational structure has the potential to solve many of the
issues you've helped me better understand. Of course, new issues will
emerge. But I know we'll be aligned and nimble in tackling them together.

This is a tremendous, proud company with a powerful brand, great products
and a bright future. Now's the time to get more focused than ever on
delighting our users and advertisers. Let's show them how great Yahoo! can
be.

Carol