Wednesday, December 6, 2006

Yahoo Reorg: Redundancies in the Air, But Will the Strategy Fly?

It's kind of hard to feel sorry for a company that so dominates online content, but you have to feel somewhat sorry for employees at Yahoo that are having to endure yet another reorganization effort to get some spring back in its step. As reported by The New York Times and other majors the reshuffling puts Yahoo CFO Susan Decker into the role of likely replacement for CEO Terry Semel as COO Dan Rosensweig and media man Lloyd Braun head for the door. Yahoo will be structured into three business units: one for client focus, one for publisher and advertising focus (headed by Decker) and one for infrastructure focus. Shades of Thomson and other large aggregators trying to engineer efficient operations.

It's probably as good a way as any to start eliminating the product fiefdoms that had proliferated at the online giant and to restore a sense of focus that had drifted as Yahoo's search and advertising efforts fell behind Google's dominant efforts, but it's not going to be easy to define a coherent sense of mission for a company that seems to be racing towards every "old" and new media player it can lay its hands on to build up page views. It's not a bad thing to have a lot of valuable content on hand, but it's not clear that Yahoo is aiming to excel in its use of content in any unique way that will set it apart from its competitors. If Google's mantra is to organize the world's content and to make it accessible, what's Yahoo's mantra?

While focusing on good destination content is still going to be a top priority for Yahoo the "how" of making it valuable needs to be made more clear to both publishers and users. In the end there needs to be a dominant player who will be a winner in helping audiences aggregate mainstream content in a way that they find to be very valuable, but building a portal is not the complete answer to this puzzle. Getting content into the contexts that matter most to audiences also means making it useful on PC, mobile devices and other non-portal venues. This all argues towards Yahoo becoming the leading expert in content packaging and delivery, regardless of whether the venue is a Web page or a TiVo or a Blackberry or whatever platform a user finds to be valuable at the moment.

In reality, though, it appears as if Yahoo will march on for now with a strategy focused on becoming a more powerful destination site. That's not a bad place to start, but as users move from page visits to experience visits on any number of devices it may not be a strategy for the most effective long-term growth. Focus on the ability to deliver content payloads any valuable context and the rest will take care of itself.
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