Yoo Hoo, Yahoo. Bartz Reorg Leaves Mission Unclear

CNET got a hold of the Yahoo reorganization memo that CEO Carol Bartz issued yesterday. But by focusing on organizational issues, is she overlooking some of the even more fundamental issues that the company must face?

First, here are the fundamental points she made in the memo:

• Yahoo’s goal is deliver “consumer and advertiser experiences.”
• Structural changes, with an emphasis on improving product quality and operational efficiency, will be in place for two to four years.
• Although product and regional teams share responsibility for revenue targets and expense management, there is a single P&L and Bartz is responsible for that.
• Yahoo will try to focus more on consumers and advertiser interests, rather than gazing at its collective navel.
• Mobile strategy will be a key focus.
• Two regions, North America and International, will deliver products and services, with an emphasis on growing international business, as the company is overly dependent on US revenue.
• There will be a global marketing strategy and organization.

One sentence in the memo seems to put things in a nutshell: ” I think this organizational structure has the potential to solve many of the issues you’ve helped me better understand.”

But are the issues which were raised internally really the biggest issues that Yahoo faces? One of the major observations made about Bartz is that she is taking the same approach at Yahoo as she did when she joined Autodesk. One question that arises is whether her experience at Autodesk can translate into success at Yahoo. Instead of asking whether an executive with a background in hardware and software can run a media company, the better thing to ponder might be exactly what Yahoo does. Here’s the company’s own description:

Today, Yahoo! Inc. has become the world’s largest global online network of integrated services with more than 500 million users worldwide. … Yahoo! powers and delights our communities of users, advertisers, and publishers - all of us united in creating indispensable experiences, and fueled by trust.

I think fuzziness in that statement is at the core of Yahoo’s current problems. Although Jerry Yang may be slow-moving and bad at running a company, he was on an important issue when during the infamous Web 2.0 conference interview he discussed his concept of building a platform.

It is impossible to create business success without focus, and the focus starts with customers and what, exactly, you do for them. Not just the value you want to bring, but specifically how you create that value and what you offer to customers. Do you design, build, and sell software or hardware? Do you offer an expertise that helps someone solve a problem? Do you unplug drains?

Right now, Yahoo does not seem able to simply explain what its business actually is. That is a completely different situation than Bartz faced when she went to Autodesk. At least that company could say that it sold CAD software. But Yahoo offers “integrated services” that presumably do something or other for some variety of folk who are anywhere on the globe. What does that mean? Compare that statement with this one from Google:

Google’s mission is to organize the world’s information and make it universally accessible and useful.

No wonder Google can spank Yahoo’s behind. It actually has a concrete business goal, and that lets it formulate a business model to make money while delivering that information. If Yahoo continues to be as hazy about what it is trying to do, it will continue to be hazy in its execution. A reorganization only helps if a company knows what it does and how it must achieve its aims. It may be that Bartz is only introducing the reorganization first to employees so they at least know to whom they report. But if clarity of purpose and a concrete reason for being is not forthcoming, I don’t see how she will be any more successful than Yang.