SUNNYVALE, Calif. (AP) – A week after announcing a painful round of job cuts, Yahoo CEO Scott Thompson unveiled a plan Tuesday that will reorganize the company into three main divisions focused on users, advertisers and technology.
Thompson unveiled the plan at an "all hands" meeting for employees at the company's headquarters in Sunnyvale, Calif. It will take effect on May 1.
According to a memo obtained by The Associated Press, the new structure aims to improve users' experience with Yahoo, work closely with advertisers in different regions of the globe, and strengthen the company's technology group.
"It's time for Yahoo to move forward, and fast," Thompson said in the memo distributed to staff.
The changes separate what had been a mixed reporting structure that made regional groups sometimes responsible for both creating content and selling ads against it.
"Yahoo was just a complex mess in terms of reporting structures," said Sameet Sinha, an equity analyst with B. Riley & Co. "Scott's just saying, 'Let's take it apart.' "
The consumer group will contain media properties such as the Yahoo home page, news, finance, sports and entertainment products, under Ross Levinsohn, executive vice president of the Americas.
The consumer group also takes over the company's search business and products that consumers use on a daily basis such as email and instant messaging tools.
Thompson, a former executive at online transaction processor PayPal, also told employees that Yahoo will renew its focus on commerce, an area he said will "play a critical role in Yahoo's future growth." The commerce team will focus its efforts on Yahoo pages devoted to autos, shopping, travel, jobs, personals and real estate.
Last week, Thompson announced that Yahoo would begin laying off 2,000 employees, a 14% cut to its workforce and the biggest in its 17-year history. Thompson, who joined Yahoo just three months ago, is under increasing pressure to turn the Internet giant around. His chief critic is hedge fund manager Daniel Loeb, who controls a 5.8% stake in the company and has been angling for representation on the board.
Yahoo's stock closed down 11 cents at $14.99 on Tuesday as the Dow Jones industrial average had its third triple-digit decline in four trading days.
“Yahoo has some 700 million visitors per month,” said Sameet Sinha, an analyst at B. Riley & Company. “It’s a matter of figuring out how to properly monetize them.”
Continue Reading >Yahoo! Inc.’s discussions to sell its stake in Alibaba Group Holding Ltd. and its Japanese operations in a tax-efficient manner have reached an impasse, according to a person briefed on the matter.
Representatives of Alibaba and Softbank Corp., co-owner of Yahoo Japan Corp., are prepared to approach Yahoo Chief Executive Officer Scott Thompson to explore another arrangement that would let companies buy back their stakes, said the person, who asked not to be identified as the talks are private.
Continue Reading >Sameet Sinha, an Internet analyst at B. Riley & Co., said one way for Yahoo to get closer to people’s “purchase decisions” and take a cut of transactions would be to acquire a company such as Bankrate Inc., which helps consumers find mortgages or other investments; Angie’s List Inc., which publishes reviews of contractors, doctors and other service providers; Yelp Inc., which also provides information on local businesses; or Trulia Inc., which helps people search for real estate.
Continue Reading >Alibaba.com Ltd. (1688) suspended its shares from trading in Hong Kong as the company prepares a statement about a transaction involving its parent, which is raising about $3 billion to buy back stock held by Yahoo! Inc. (YHOO)
Continue Reading >The Sunnyvale, Calif., Internet company, which is now shopping itself to potential buyers, on Tuesday said that its third-quarter profit dropped 26% from a year earlier while revenue fell 24%. Yahoo also reported its fourth consecutive quarterly slowdown in the growth rate of its display-ad sales—its most important business, which includes graphical, interactive and video ads. Display-ad sales revenue was flat from a year earlier.
Continue Reading >A focal point of board discussions are Yahoo’s Asian holdings—a 40% stake in China-based Alibaba Group Holding Ltd. and a 35% stake in Yahoo Japan—which represent one-third to one-half of Yahoo’s overall value, according to analysts from B Riley & Co. and Stifel Nicolaus & Co. Yahoo has a market capitalization of about $18 billion.
Continue Reading >Regardless of who follows Bartz, Sinha said the next CEO must focus on reinvigorating employee morale and updating technology. “[Yahoo] employees have been disheartened for the last four years,” he said. “There are so many fast-growing companies out there that tech employees can leave and get a job anywhere. They need to stop the exodus of people leaving Yahoo.” But he emphasized that breathing new life into a tech company past its prime has not proven to be an easy path. Numerous CEOs have tried—and failed—to revive Yahoo. Meanwhile, at competitor AOL, CEO Tim Armstrong is struggling through his own company’s rehabilitation. EBay is the rare company with a turnaround success, which was largely thanks to PayPal, Sinha said.
Continue Reading >“We are initiating coverage…with a Buy rating and a 21 price target. We believe the next 12 to 18 months should provide a win-win situation for investors: Either the management team will turn this company around, or the mounting investor discontent will force management to take steps to unlock value in its assets.”
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