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2008 was the year Yahoo probably wishes it could forget.

From the company's disastrous handling of Microsoft's acquisition bid to its failed search advertising deal with Google to continued marginalization of its search business, 2008 showed one of the internet's biggest brands to be a company in disarray.

With a new CEO, Carol Bartz, at the helm in 2009, Yahoo is hoping that 2009 is a year that won't be so forgettable.

Nobody expects Yahoo to go from bust to boom in the midst of a global economic slowdown but there are a lot of important steps Yahoo needs to take if it hopes to recover some of its past glory.

If AllThingsDigital's Kara Swisher has accurate information from her sources, Bartz isn't wasting any time taking those steps. According to Swisher, Yahoo may announce as early as this week some major organizational changes that are designed to reshape the company for success.

The two biggest steps she may take:

  • Rolling back some of the reorganizational measures taken by former CEO Jerry Yang and director Sue Decker. That means that some executives are likely to be out of work.
  • Centralizing product development. Currently most of Yahoo's media properties are managed individually by separate divisions. Under the rumored Bartz plan, all product development would be run under Ash Patel, who is the EVP of the company’s Audience Product Division. Interestingly, Swisher reports that editorial programming would still remain separate.

Will it work?

Nobody knows. The concept of centralizing product development to eliminate redundancies and gain efficiencies has its proponents and detractors.

One unnamed supporter in the Yahoo ranks told Swisher:

This is a good and smart plan to achieve better balance between the benefits of a globally scalable product development and the need for regions to be very close to and responsive to local user and advertiser needs…there is huge upside (in user engagement and monetization) that will come from a deeper focus on editorial, content (original and licensed) and programming within the properties and most importantly across the network.

Yet detractors argue that product development and editorial programming go hand and hand. One told Swisher, "It’s like separating the cook from the recipe and ingredients."

Personally, I don't think there's a right and wrong answer when it comes to reinventing Yahoo.

Bartz's success will depend on whether or not she is able to convince Yahoo employees that she has a viable plan; one that they believe in.

Organizational structure matters; the people within the organization matter more. If they don't buy into Bartz and her vision, even a good plan won't work.

That's perhaps the biggest challenge Bartz faces. Yahoo is like a ship that is bruised and battered coming into port after a long voyage. After patching the ship up as much as possible, if she can't convince the crew that the ship is seaworthy before it's due to sail its next voyage, she had better find a new crew.

Patricio Robles

Published 23 February, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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