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Yahoo!’s Got Peanut Butter All Over

It’s the place you go to for your tickets to the Bahamas, for the latest review on the iPod Shuffle, for a little tête-à-tête with friends and family, for the low-down on the Britney-K-Fed divorce settlement to the sanctions placed on North Korea post nuclear testing.

Yes, this is the Yahoo! most of us have come to know and love. A place for everything and anything. Yet beneath the bright and cheerful exterior of the Yahoo! homepage, “all is not well”. Yahoo may be the most popular Internet brand in US with nearly 106 million unique visitors in September; yet its overall growth was just 6.5 percent last year, and number of people using some of its services is down.


This same directory-like nature of Yahoo! [Yet Another Hierarchical Officious Oracle] is what prompted a second-tier executive of the company — Brad Garlinghouse — to issue a memo, calling for a radical corporate restructuring of the Sunnyvale, California company.

In the memo, dubbed the “Peanut Butter Manifesto”, Garlinghouse says that Yahoo! has thinly spread itself (à la peanut butter) over one too many things, their lack of focus almost implying that they stand for nothing in particular.

“I hate peanut butter. We all should.”

"We want to do everything and be everything — to everyone. We've known this for years, talk about it incessantly, but do nothing to fundamentally address it. We are scared to be left out. We are reactive instead of charting an unwavering course” according to senior VP Garlinghouse

The call for restructuring follows a series of embarrassments that have caused Yahoo! shares to lose 31.5 per cent of their value so far this year. It is struggling with a slowdown in parts of its advertising business while racing to keep pace with far-faster growing rival Google.

The memo calls for greater accountability and ownership in a company where “for far too many employees, there is another person with dramatically similar and overlapping responsibilities.” He also calls for replacing the bureaucratic organizational structure that has separated people “into silos that far too frequently don't talk to each other” with that of a General Manager structure that should work in sync with Yahoo!’s focus. Besides this, the Yahoo executive also named several duplicate services that Yahoo! offers that work against each other and need to be eliminated like Flickr and photos, Deli.cio.us vs. myweb, Social media vs. 360 and Groups etc.

Garlinghouse said that as part of a plan to reshape the current business unit structure the Sunnyvale, California-based company should 15 to 20 percent of its workforce. Yahoo! currently has 10,000 employees worldwide. "There are so many people in charge (or believe that they are in charge) that it's not clear if anyone is in charge."

However, after four pages of brutal honesty, Garlinghouse’s memo did have a note of optimism.

“If we get back up, embrace dramatic change, we will win.” The dramatic change being about focusing Yahoo!’s vision, restoring accountability and clarity of ownership and executing a radical reorganization.

Judging from all this, one can defintely say it will take more than a memo to change the status quo at Yahoo!. According to TechCrunch’s Michael Arrington “If changes are made, he looks like a hero. If they aren’t, he can take credit for trying.” Eitherway Brad Garlinghouse is a winner.

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