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Yahoo! has announced a major re-organisation of its management in a bid to simplify its structure and take on Google.

After the company’s dissapointing performance this year, as well as the leaked ‘peanut butter’ memo last month, the news doesn't come as a big shock. But many in the blogosphere are surprised that under-fire CEO Terry Semel has retained his position.

Yahoo's press release explains that the company will be split into three operating units - the Audience Group, the Advertiser & Publisher Group and the Technology Group - all reporting to Semel. It hopes the restructuring will help it deal with a rapidly changing internet landscape, especially competition from social networking sites.

On the creation of the Audience unit, which will oversee Yahoo!'s existing consumer products, Charlene Li said:

“Of all the groups, I think this is the one that will make or break Yahoo!'s strategy. In the end, the race is not to be the best search engine technology-wise, or to have the most advertisers. It's about being relevant to your audience, no matter where they go or what they do.”

As for the Advertisers & Publishers group, it will be led by current CFO Susan Decker - who many see as Semel's eventual successor. Yahoo! has the largest audience of any portal, but is failing to keep up with Google in terms of ad revenues.

Meanwhile, the Technology unit will be headed by Zod Nazem, the company's current CTO. Semel explained:

“We intend to focus our engineering investments and move towards more integrated product development teams. We’ve also created a new Platform & Infrastructure sub-group, which will build high-impact, global platforms for everything from advertising to social media.”

In his official blog post, Semel said Yahoo! now has the "right strategy, the right structure and the right people", but several bloggers think that many of the company’s problems are a result of his leadership.

Valleywag gives a rundown of what it says are his major mistakes as CEO, including its failed attempts to buy YouTube and Facebook.

Eric Jackson at VentureBeat has a shortlist of the steps Yahoo’s board needs to take to revive the company’s fortunes, and first on the list is ‘fire Terry Semel’.

Writing on TechCrunch, Natali Del Conte isn’t surprised by the changes, but adds that "If Yahoo is really serious about redirection, then no senior executive, particularly Semel, is safe from the chopping block".

Whatever the opinion of bloggers, it seems that Semel's position is secure for the time being. Perhaps this reorganisation will provide the 'single cohesive strategy' that Brad Garlinghouse called for in his leaked memo.

Semel claimed, unconvincingly I'd say, that the shake-up has nothing at all to do with that memo:

"Now, I know what you’re thinking — this is all about peanut butter. Actually, we’ve been orchestrating this plan for a number of months as we envisioned the next phase of growth for the internet."

Graham Charlton

Published 6 December, 2006 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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