Yahoo Trumpets Reorganization

Effects of the Reorganization

On paper, the reorganization looks like it could help simplify and streamline key processes in order to help Yahoo achieve its key goals, said industry analyst Greg Sterling of Sterling Market Intelligence. However, it's hard to predict whether the plan will have its intended effects, because there are a lot of internal elements and dynamics that drive reorganizations but remain shrouded to outsiders, Sterling said.

"Reorganizations are very hard to second-guess because you don't necessarily know the people who are getting promoted or shifted around, and you don't see a lot of the internal considerations driving the decisions," Sterling said. "There's a lot of opacity there."

Based on their track records, the people being put in charge as part of the reorganization seem capable and respected, and it will be key for them to inspire confidence in the employees and generate enthusiasm among them, Sterling said. "You can reorganize and reorganize, but if you don't have strong leaders and engaged employees, then you won't get the desired results," he said.

The announcement of the cloud computing and data infrastructure group left Gartner analyst Allen Weiner scratching his head and wondering if that means Yahoo plans to enter the market for hosted IT services like Google and Amazon have done.

Asked for clarification about this point, a Yahoo spokeswoman indicated that this is a possibility but didn't offer more details.

This new group will consolidate and extend the company's considerable resources and talent in cloud computing, including Yahoo's ongoing support of the Hadoop open source grid computing project, she said in an e-mailed statement.

The resulting "next generation cloud computing and data infrastructure" at Yahoo will not only power the company's existing and future sites and services, but also "any services ultimately extended to customers," she said. "However we are not discussing any such details today."