Yahoo reorgs into three groups. CFO Susan Decker gets operational control of the "Advertiser and Publisher" group. Farzad Nazem, who's been there FOREVER, gets all of technology. And they're gonna bring in someone to run the content side (Audience) group. (Good luck with that, btw).

Who's not on that list? One missing name is Semel golden boy Jeff Weiner, who was responsible for search when Yahoo! Search didn't get fixed. The infamous Lloyd Braun, another Semel guy, has been non-grata for a year and is now gone. And Brad Garlinghouse - who cares?

My initial reaction to the reorg is: Close, but no cigar. Semel isn't the answer. My main reason for this is that he's been too patient with the problem child: search advertising, even though the Overture team is in his backyard down in Pasadena. Fundamentally Terry Semel doesn't have the technical chops to kick the right asses at Yahoo.

Decker is a good choice to run the ad business. But 'Zod in charge of technology isn't really a change of any kind.

Losing Rosensweig is probably not a benefit, though.

Here's what Yahoo should do:

• Leverage the mail user base, revolutionize and market the display ad business on a Google-esque scale. This means opening up the behavioural targeting to a much larger swath of advertisers. Do for behavioural targeting what Amazon did for recommendations. Make it THE CORE and make it huge. Yahoo's the only one that has this.
• Put in an open marketplace. Create an AdWords-like auction market for ad space that knows who's looking at cars or mortgages. I know they have this technology, but they need to make it a $10B revenue stream, up from the $4B it is today.
• Fix search monetization. The Panama rollout is underway. Once that happens, clean out Overture of the people who failed to deliver it 2 years ago. Then make an all out run at Google - develop a way for advertisers to dump entire Google campaigns right into Yahoo. Respond to advertisers better than Google.
• Monetize all the APIs to get the publishers using them. Yahoo innovates in APIs but they are mostly for geeks. Attach monetization to them, so that publishers will build businesses around them, like is done today with AdSense, the Amazon Associates program, the eBay affiliate program and the Shopping.com Partner program. This means: ADD A WAY FOR EVERYONE TO MAKE MONEY when they build with the APIs.
• Go Wide with YPN. NOW! DAMMIT! Before MSN launches their contextual program. This is another inexcusable Overture mess.
• Get serious about distribution deals. Win the next 5 from Google. Focus on entertainment content, news, mobile, games. GET MORE INVENTORY! Areas you already are in. You can't change that Hollywood personality with Semel at the top in any case.
• Companies Yahoo should buy: RightMedia, DoubleClick, AzoogleAds & EfficientFrontier. These are not content companies, but advertising marketplaces they could centralize and leverage.

Can Yahoo do it? I doubt it. I think Semel is the wrong quaterback, and lacks the confidence of the team. I don't think the re-org is radical enough.

¶ 12/05/2006