Changes at AOL’s local content site, Patch: CEO Jon Brod will step down and is being replaced by COO and President Steve Kalin, according to an internal memo the New York Internet company sent to the division’s employees today.

As part of the move, Brod will be going back to run AOL Ventures, in a job where he began at the company.

In addition, sources said a little less than three percent of the 1,400-employee Patch staff will be laid off. The memo notes that downsizing, without giving the numbers, which includes consolidation of several parts of Patch by streamlining its regional structure from 20 to nine teams.

According to the memo, the layoffs are to “make Patch profitable in 2013 and a commitment to continue to improve our business model.”

AOL confirmed the contents of the memo, saying in a statement, “Patch is streamlining its regional editorial structure across the country by moving from 20 to nine teams. We are implementing this team approach based on the success of our field tests earlier this year. The team approach allows for flexibility based on the unique needs of each community and the strengths of our editors. We are not reducing our number of sites or our coverage area as a result of this change. Making these important changes came with the difficult decision to eliminate some positions. We recognize these changes are painful for individuals and for our organization — and we are committed to handling the people impacted with care and sensitivity.”

Patch is growing, according to comScore. In April, traffic was up 26 percent since last year to 13 million unique monthly visitors, who are consuming about 1.3 million pieces of content that are now being served up per month.

Still, Patch has attracted a level of investor pressure and criticism, even as AOL CEO Tim Armstrong has stuck strongly with the hyperlocal content effort and invested heavily in growing out a network of sites across the country aimed at neighborhood news and events.

But Armstrong signaled changes when he was queried about Patch during AOL’s recent quarterly call: “What you’re going to see as we approach Q4 is us trying to get to the finish line of profitability, and we will use all means possible to get there.”

Apparently, Armstrong means what he says and says what he means.

Here’s the memo:

Patchers,

Since the day Jon, Warren, and I founded Patch, we have had one mission in mind — improve the lives of people in local communities by 25 percent. Patch has become an important brand in the hundreds of towns we serve, and it is a staple of our communities. With the average Patch just over two years old, we are well on the way toward our goal of improving peoples’ lives and building a sustainable business in the process.

Over the past year, Patch has made an enormous impact in our communities. The coverage of the Boston Marathon bombings, the lifeline that Patch provided residents during the Sandy Hook school shootings and Superstorm Sandy, and the exclusive Sanford-Colbert Busch debate in South Carolina stand out as powerful examples. The new Patch platform that is rolling out now will only increase Patch’s ability to instantly improve communities.

As we have made a commitment to improve our Patch towns and communities, we made a similar commitment to make Patch profitable in 2013 and a commitment to continue to improve our business model. Just as we have rolled out new products and services to Patch, we are announcing today the rollout of the recently tested town structures, which will help us serve communities in a more local way and move Patch meaningfully toward profitability.

The changes have two main goals:

1. Improve and increase our hyper-local programming and deepen our user engagement through the Patch 2.0 platform; and
2. Implement a structure that unlocks the path to profitability.

To accomplish these goals we are taking the following steps, effective immediately:

We are combining the East, Central and West editorial zones to create a simpler structure that will enable faster decision-making and a more coordinated editorial effort across Patch. Anthony Duignan-Cabrera has been promoted to VP, Editorial Director, overseeing day-to-day editorial field operations, and will continue to report into Rachel in her role as Chief Content Officer.

We are streamlining our regional editorial structure across the country by moving from 20 to nine teams. We are not reducing our number of sites or our coverage area as a result of this change.

We are promoting Katie O’Connor to Director of Editorial Operations and Content Strategy. In this role, she will work with our editorial teams to help create new content and programming.

We are implementing a “team approach” for our sites, based on the success of our field tests earlier this year. This approach allows for flexibility based on the unique needs of each community and the strengths of editors.

Jon and I have decided to elevate Steve Kalin to the CEO position at Patch. Steve has done a fantastic job since he began at Patch in December as President and COO. Jon and I hired Steve with the thought that his extensive background in scaled, local platforms would eventually allow him to run Patch on a day-to-day basis.

Jon has led Patch since it was just an idea and helped scale it into one of the most significant brands in local communities in the U.S. Under his guidance, Patch has gained tens of millions of users and more than ten thousand advertisers; and it has covered millions of local stories. Going forward, Jon will return to AOL Ventures full-time and lead our push into several areas we have identified as significant future growth opportunities for AOL.

The changes we are making at Patch, however, come with the difficult decision to eliminate some positions. These employees have contributed greatly to Patch’s business with passion and dedication. We sincerely thank them for all they have done to make Patch what it is today. Their impact will always be felt here. We wish all affected employees continued success. They are truly Patchers for life.

This is an important time for Patch. We have many great opportunities in front of us, and we continue to make decisions to ensure Patch’s success. AOL’s Board of Directors and I remain firmly supportive of Patch and our mission. Together we are building a company for the long term, one that can grow and thrive — now and far into the future.

We will be having team calls today and a Patch All-Company call this afternoon at 6pm ET, to discuss these changes in more detail. I encourage you to join these calls. Keep an eye out for invitations to follow.

I want to thank you for your continued commitment to Patch and to serving your communities, and for staying focused on our goals. Patch is one of the fastest growing sites and brands on the Internet. We have the right plan, we have a great team, and I’m confident we can win together.

Keep going — TA

Tonight, new Yahoo CEO Marissa Mayer gave her first public interview since becoming the leader of the troubled Silicon Valley Internet giant.

Not to cranky me, of course, but to the much more amenable Fortune magazine writer and editor Pattie Sellers, who hosted the former Google exec at a dinner in Palo Alto, Calif., as part of the magazine’s Most Powerful Women franchise.

Fortune recently put a glamour shot of Mayer on the cover, and Sellers also did a profile. Now, Mayer was ready to sit down to talk about Yahoo and more.

(I wish I could have reported from the event, and almost did. I had initially been invited to the dinner at the Garden Court Hotel for about 100 guests, mostly women. But I was then waitlisted, and then told by Sellers directly that I could not attend, as the editors had decided to close out outside media and only have Fortune staffers covering it.)

Whatever! I have my ways to liveblog it and do it faster than any magazine writer can — and none involve disguising myself as a cater-waiter or solely using the Twitter feed from Fortune. As if!

Here goes:

7:50 pm: After some lovely cocktails, the audience sits down at about 10 tables of nine people and starts in on the salad course.

Soon enough, the night starts off with a speech by a McKinsey partner (and presumable sponsor of the dinner), delivering some stats as part of a study of some sort about how businesses are using — or should be using — social tools.

More than 60 percent of knowledge workers spend time exchanging information … Social can deliver an estimated $1 trillion in value.

Big news! Not! Even! Slightly! Oh dear, please get to the opening act!

Finally, Sellers gives her intro of Mayer.

8:04 pm: Sellers notes that her conference had hosted Yahoo CEO Carol Bartz in 2010 (she was ousted in 2011), and in 2011 had Mayer when she was an exec at Google (she became Yahoo CEO this year).

Now, in 2012, Mayer is top dog at Yahoo, and the youngest CEO in the Fortune 500.

“Why don’t we just call this ‘the most powerful Yahoo dinner,’” jokes Sellers.

Why not!

Mayer — for those who care, and forgive me, since I am fashion-stupid — is wearing a black frock and some heeled Mary Janes. She gets big applause when Sellers notes that Yahoo stock is up 18 percent since Mayer became CEO.

Note: It did go down when she made a shareholder misstep early in her tenure, but has gone up since she repeated mobilemobilemobile with confidence on a recent earnings call that got investors excited about her tenure.

8:08 pm: By the way, Mayer put in a call for people to vote for her as Time magazine’s Person of the Year (she is on the list of nominees — more kudos from a Time Inc. property).

Mayer starts off with basic PR messaging that she trotted out previously on the recent earnings call, around how she wants Yahoo to be focused on “delighting and engaging users” and how it is a brand that touches people every day.

Therefore, its products need to be inspiring and delightful.

Daily delight! This is the buzzword.

Also, she notes, Yahoo should be the bestest place to work.

As apparent proof of that, Mayer says that all Research In Motion BlackBerry smartphones have been banished, and that Yahoos will be using Apple’s iPhones, Google’s Android phones and Microsoft’s Windows phones.

This has been endlessly reported, even though most other Internet companies do this, but it’s a good line, anyway.

8:12 pm: By the way, iPhones are the most popular with Yahoo employees.

News at 11! (I will add that iPhones are the most popular with the Swisher boys, too, and — irony alert — one of their moms works at Google.)

Sellers then asks about what makes a good product, which is precisely why the product-savvy Mayer was brought in to fix Yahoo.

Says Mayer: “Acute user need.”

I acutely need doughnuts. Does this count?

Also, says Mayer, products have to be created in a way that is “frictionless and beautiful,” and that the offering cannot get in the consumer’s way.

Sellers asks her to name a great product. Mayer notes that she was not talking acquisitions, but quickly namechecks the iPhone and Google.

Since those companies’ market caps are a billionty times bigger than Yahoo’s, she def cannot acquire anything there.

8:17 pm: Mayer also apparently likes some kind of luxury paper made in Germany that looks like velvet. It’s Gmund, by the way.

The topic moves on to Flickr, the once hip photo-sharing service that Yahoo bought and proceeded to ignore. Meanwhile, Instagram.

Mayer says that Yahoo needs to focus on the “global suite” services that are excellent, and on executing them well.

She points out Yahoo’s fantasy football service, mentioning its recent breakdown on game day that sent fans into a tizzy.

It’s a they-love-us-so-much-they-hate-us point.

Yahoo will not do things like online maps, though, Mayer says, noting that where Yahoo cannot compete, it should partner.

Sellers asked about acquisitions.

Mayer: Mobilemobilemobile! (It worked before!)

8:22 pm: Mayer then mentions the importance of small teams that work together, such as its recent Stamped purchase.

She notes that the bigger and more strategic opportunities are around advertising technology. Calling the Rubicon Project!

Mayer veers away from a question about layoffs, a sad Yahoo tradition. I have reported previously that she will make cuts via performance reviews.

At Yahoo, she says, it’s now about performance, not potential: “No offense to potential, but what we really care about now is performance.”

No offense taken!

Also, everyone’s goals will be posted on the Yahoo Web site for everyone to see.

Oh, wait, there will surely be offense taken by those lazy potential people at Yahoo.

Mayer does add that Yahoo should be a “growth company,” and not one defined by cuts.

8:28 pm: “The consumer Internet is growing, and we need to invest,” she says.

To achieve this will be a hard job, and will take multiple years, she adds.

Sellers asks about the Disney turnaround, which Mayer is apparently fascinated with. Mayer does indeed love Disney.

Who doesn’t? (Well, me, but I am an outlier.)

Speaking of Disney, one of its directors, Facebook COO Sheryl Sandberg, sent regrets, but has emailed a question from its board meeting in New York.

Sandberg once worked at Google with Mayer, though the pair is still not working on a search engine together.

Sandberg asks what was most surprising to Mayer about taking over at Yahoo.

Mayer says she thought the job would be hard, and her new baby would be fun. Mayer had her first child at the end of September.

“The job is fun, and the baby is easy,” says Mayer.

Sellers wants to know how Mayer gets it all done. The answer: “Ruthlessly prioritize.”

She notes that that’s why she has not talked to the media at all, and why she will not be talking after this event.

(Well, I guess I will go back to not waiting by the phone for Yahoo PR to call back. Hi Anne! — also looking forward to not getting the holiday media party invite, which is no prob as the Googlers are throwing one the same night and they usually have organic arugula picked by elves they employ that’s acutely delicious.)

Then, as a Wisconsin Green Bay Packers fan, Mayer does her version of the famous Vince Lombardi quote: “God. Family. Yahoo.”

Cheesehead moment! And Mayer and I have so much in common! Mine is: Dog. Family. Yahoo.

8:33 pm: Sellers throws in one more question from famed investor Warren Buffett, who apparently wants to know what, if Mayer was not CEO of Yahoo, would she want to run?

Not Berkshire Hathaway! Mayer says she would build something herself.

It seems as if that is what she is doing at Yahoo, so we await the result.

Until then, Mayer’s mum. So to speak.

Yahoo CEO Marissa Mayer is now starting to unveil the flip side of free lunches and smartphones, with two employee-focused moves that are a little more tough love in nature.

According to several sources close to the situation, she has officially ended a longtime practice at the Silicon Valley Internet giant of giving most of the company the week off between Christmas and New Year’s.

While many Internet companies slow down in that holiday period and many are much looser about employees taking time off, Yahoo is one of the few that closes down the company, except for essential staff. (LinkedIn also currently offers a rest week to employees.)

Eliminating the rest week is probably a long time in coming and many at the company have long thought it should be eliminated, since it has been paid time off for Yahoo’s 12,000 employees.

“Yahoo has a lot of work to do, so there’s no time to rest,” said one staffer in a common sentiment.

That said, from a financial point of view, the rest week practice does have positive implications for Yahoo. Besides compelling staff to burn off a week of vacation in the current quarter and not carrying over those costs into the new year, there are also cost savings in terms of keeping its facilities going.

No rest week aside, employees are also about to experience an even bigger change soon, as Yahoo’s HR department prepares a new plan to evaluate the efficacy of its staff.

Under Mayer’s plan, sources said, there will be new measurements of performance instituted, based on a variety of benchmarks and evaluations, in order to better understand who the best employees at Yahoo are.

Once that is complete, the company is likely to begin cutbacks on compensation for the bottom 20 percent, including moving them out of Yahoo entirely. The company has suffered many rounds of layoffs over the years, which hurt morale badly due to the often haphazard nature of the cuts.

Mayer is aiming to make the process more organized; she talked about this performance-based system in a company meeting in September. At the time, she noted that employees would be judged on four “Cs” — culture, company goals, calibration and compensation.

In a follow-up memo and meeting, Mayer told staff about this process:

“Moving forward, we will have both annual goals and quarterly goals that we will all commit to, track, and grade ourselves based on … We will then cascade the goals down through the company at the department, team, and individual level …”

What she was talking about is similar to an employee evaluation method used at Google — where Mayer spent her entire career before becoming Yahoo’s latest leader — using an elaborate series of data points to judge how individual employees are doing.

In other words, Yahoos are about to get graded on a very clear curve.

One of the looming — but, thus far unspoken — questions about the strategy that Yahoo CEO Marissa Mayer is set to unveil to the Silicon Valley Internet giant’s employees today at 10 am PT is just how many of them are going to be there to push forward the new turnaround plan she’s envisioning.

While it seems unlikely Mayer will mention this unhappy prospect in today’s all-hands meetings with staff, it’s an issue she will nonetheless eventually have to address.

But, despite promising today’s talk would be an “act of radical transparency,” I am guessing any employee-cutting plans Mayer has will remain decidedly opaque for now.

Still, it’s no secret that most analysts and Internet-savvy observers agree that Mayer must make significant cuts in staff in order to move forward, perhaps well beyond the ones that have been made by her predecessors.

And while every single recent Yahoo exec has done layoffs, usually of several thousand, many investors are watching to see if Mayer will make deeper and more company-changing ones.

“Yahoo probably needs to be cut in half,” said one person close to the company, who has told Mayer this. “But no one has had the guts or stomach to do it yet.”

According to Yahoo’s last quarterly report, it had 12,500 staffers, although that underestimates the number since there are also several thousand contractors that the company employs on top of that.

Many think that’s way too many, given the downward growth at Yahoo over recent years and the need to shed non-performing businesses.

One way that previous leaders, including ousted CEO Scott Thompson and interim CEO Ross Levinsohn, had considered cutting staff in a major way was to outsource its advertising tech and search businesses.

But that does not seem to be Mayer’s plan — she’s indicated internally that she wants to invest in both, which will require more staff and lots of money.

Still, there are plenty of areas to aim at, including Yahoo’s outsized number of staffers in general and administrative areas, as well as a number of operating units that have little traction.

The strategy around how to right-size the company will fall to newly installed HR head Jackie Reses, who came to Yahoo with a background in private equity.

(I’ll be writing more about Reses and her unusual role at Yahoo soon — Mayer has also put her in charge of business and corporate development. But, suffice it to say, PE execs know a lot about cutting costs.)

As I said, I’d be surprised if Mayer sullies her presentation about the gleaming future of Yahoo today with the ugly realities of inevitable layoffs. But that does not mean that such choices will go away.

While we await Mayer’s plan to be handed down, let’s recap my recent series of posts on the future of Yahoo under Mayer, who has been on the job for two months now.

Here’s the highlights:

• Mayer is zeroing in on improving Yahoo’s search business and advertising platforms. Efforts include reworking Yahoo’s troubled search deal with Microsoft and possible ad tech acquisitions and also investments.
• Besides all the cultural changes she has made — free food! — Mayer is also, according to an internal memo I obtained, planning on holding the company to strict annual benchmarks of performance.
• She is also initiating a series of product changes, including a major redesign of the home page to make it more of a platform, as well as an email refresh. Mayer is also focusing in on 10 key verticals, such as the powerful Yahoo Finance, and is likely to address the importance of mobile for Yahoo.
• Lastly, she has sicced her top lawyer on leaks, even as she has instituted a policy of minimal interaction with the media. To be fair, there’s little to say about Yahoo right now, so it makes sense on some levels; on others, it’s hard to imagine the riveting story at a public company can avoid press scrutiny.

Whatev! Whatever Mayer does, we’ll do our best to get you even more deets of her strategic vision for Yahoo as it is unveiled.

(Photo courtesy of Yahoo’s Flickr.)

It’s been nice to see all the euphoria at Yahoo about free food and Apple iPhones kicking it up a notch.

But, purple people, guess what? Them’s just your basic table stakes in Silicon Valley these days and pretty much everyone else has had such perks for a long while now.

Thus, as nice as it is to drink your coconut water gratis, after two months in charge, it’s long past time to focus on what new Yahoo CEO Marissa Mayer is up to besides making much-needed but obvious cultural changes at the troubled Internet giant.

She’s been busy with the expected listening tour of employees and also outside tech players — such as former Yahoo CEO Terry Semel — which is a textbook stop in the turnaround playbook.

Now comes the hard part: Actually beginning to make the significant decisions about how she’s going to turn around Yahoo and what the key issues of strategic focus need to be.

In a series of recent meetings, according to numerous sources inside the company, Mayer has begun to outline what those are to top staff.

Not surprisingly, they are many of the same thorny issues that Yahoo has been facing for a long time and which center primarily on making the company relevant again in a wide number of ways.

I’ll get to many of them over the next week in a series of What Will Marissa Do? posts — including looking closely at her new hires, when and how Mayer will deal with inevitable layoff decisions facing the company, where the sale of Yahoo! Japan stands and, finally, what she’s cooking up for key Yahoo products.

But the focus has to fall first of all on search and advertising, the two arenas that Mayer has been studying most closely, according to numerous sources close to the situation.

That has included a recent meeting and numerous discussions with Microsoft CEO Steve Ballmer about improving Yahoo’s search advertising partnership, said sources at both companies.

That deal has been largely disappointing since it was struck under the regime of ousted CEO Carol Bartz several years ago.

Many reasons are given for the poor performance of the entire arrangement, including lack of improvement of cost per click and share growth for both parties. That means bid density and numbers of advertisers remain too low, especially compared to Google’s offering of access to a larger, more active and lucrative market.

Simply put, despite massive spending by Microsoft on search, users and advertisers get significantly better results overall with the search leader Google.

(You can read a great piece by Search Engine Land’s Danny Sullivan from last year, which exhaustively looked at the issues until then.)

The irony abounds that it’s up to Mayer to fix this problem of improving revenue per search with Ballmer, since she has been among the executives who have made Google the search behemoth it has become.

Her particular expertise has been on search experience for consumers, which is just the area that Yahoo desperately needs to improve after handing over technology duties to Microsoft.

That move was controversial at the time and some feel it was a big mistake. But, most also think there is no going back at this point, given the enormous cost of running a serious search enterprise.

Such an idea is still being raised inside Yahoo, although it seems more nostalgic than a realistic possibility, given the enormous price and, more importantly, the departure of the company’s core search engineers in recent years.

That doesn’t mean Yahoo under Mayer can’t be key to helping solve Microsoft’s search tech problems. She certainly knows the entire arena, which has already given Yahoo increased credibility among Microsoft’s search engineers.

“None of Yahoo’s many CEOs knew anything about search technology and that’s certainly not the case here with Mayer,” said one person close to the situation at Microsoft. “When she walks in, she instantly has status among the geeks as someone who knows what she’s talking about.”

It still may be a losing battle, due to Google’s overwhelming dominance, but if anyone at Yahoo can spot areas of even small improvement — which can yield big returns — it could be Mayer.

In addition, she can spearhead Yahoo’s own efforts to reverse — or perhaps simply stop — search market share declines via delivering a better consumer offering.

That’s still heavy lifting, no matter the exec, since both Microsoft’s Bing and Google are better equipped to win here, too.

“It hard to imagine we are going to slow down in any way,” said one former colleague of Mayer’s at Google to me recently in a rather ominous tone. “We’re only going to get more competitive.”

Pressure much?

And more: Mayer is under a time limit, since guaranteed payments Microsoft agreed to pay Yahoo for the shortfalls on what was promised will be running out next year. The pair has renegotiated that deal before, and it will likely have to do so again.

Of course, Mayer could try to walk and threaten to take Yahoo’s search business elsewhere, a move that former CEO Scott Thompson was mulling before his ouster.

That’s not a surprising ploy, except it is probably impossible to pull off, a fact acknowledged by top Yahoo execs.

“It might feel good to say we have options in search,” said one person close to the situation. “But that ship sailed years ago.”

Indeed, especially since Google is the only choice of possible alternate partners and such a move is rife with major obstacles.

There is the issue of the contract with Microsoft, which could lead to a potentially explosive legal struggle Yahoo can ill afford.

“They can try to get out of the deal,” said one high-ranking person at the software giant. “But that’s a lot easier threatened than done.”

And, there is the clear regulatory hairball any search hook-up between Google and Yahoo would lead to.

That’s happened before, which Mayer knows well since she was a top exec in Google’s business when it tried to partner with Yahoo as a way to prevent Microsoft’s hostile takeover bid for the company.

While times might have changed, Google is currently facing a likely battle with the Federal Trade Commission over its powerful search business, and trying to get Yahoo’s business now is a non-starter.

Thus, finally fixing the Microsoft partnership is key to Mayer’s success since it represents a little over one-third of revenue of Yahoo (see the chart below).

The bigger part of Yahoo’s business, as you can also see from the chart, has been display revenues. And that, too, has been a sorry tale of declines and ever more disappointing results.

A report by eMarketer on display market share had this depressing chart for Yahoo:

As is clear, the march downward for one-time leader Yahoo has been swift, and the prospects for the future are worse as Google and Facebook vie for leadership.

The reasons for this have been myriad, but Mayer has apparently decided that it’s been due in large part to the broken Yahoo ad tech platforms and their ever weaker performance.

As we have previously reported, she has determined that it’s now time to invest in improving them, both by funding internally and external acquisitions.

For that, she has formed a tight group of execs to scan the landscape for tasty and innovative treats for Yahoo to gobble up.

That includes: Scott Burke, SVP of Yahoo’s advertising and data platforms; Brian Silver, who runs the company’s Right Media Exchange; Xuhui Shao, a key engineering VP under Burke; and Mark Morrissey, the longtime tech exec who previously ran the company’s search business and was key to integrating the Microsoft search deal into place.

The cerebral Burke especially has been pushing ad platform improvement for a while and finally seems to have won the battle against detractors of the big and possibly grandiose plan by appealing to Mayer’s interest in not giving up.

Thus, the tabling of plans by Thompson, as well as interim CEO Ross Levinsohn, to outsource some of the automated parts of the display business to Google.

Those talks were very serious, as well as others to sell off Right Media, but they are done for now.

One major issue — the people in charge of the ad platform turnaround could also be seen (and most definitely are) as mired in Yahoo’s legacy of lackluster results and poor performance.

“It is kind of funny that the guys responsible for the decline now have the responsibility for fixing it,” said one source at Yahoo.

It’s a fair point to be made.

But that’s water under the bridge, apparently, since the group has been making the rounds, helped by Yahoo’s M&A execs, with a wide range of companies in many different ad tech area being considered (and some dismissed), including: Mediaocean, Turn, Criteo, PubMatic and Millennial Media.

Millennial is the most interesting, because it is a mobile ad play, where Yahoo is exactly nowhere (to be fair, less than nowhere) after years of botched efforts.

As with other companies, this is a critical arena for Yahoo, and yet one more that Mayer needs to focus on.

Lastly, Mayer has to make sure Yahoo’s premium display business remains strong. This is much more based on relationships with large advertisers than on major sponsorship and branding offerings, as well as creating consumer products and content that is appealing to marketers.

This area is now headed up by former Google exec Michael Barrett, who has publicly said he was staying put for now at Yahoo as its chief of revenue.

In fact, because he is in charge of all sales, he occupies the second slot under Mayer on Yahoo’s now strangely configured, punctuation-impaired and information-free management page.

But numerous sources inside and outside Yahoo said Barrett has also told many people that he is still not fully committed to staying in the role for the long haul.

If he eventually gets a lucrative exit package — something the new boss is not being very generous with overall, said sources — that will mean Mayer will need a high-profile and well-regarded ad exec to replace him; sources said Mayer has already begun reaching out to some candidates.

The pickings are slim, with only a few names on the list of those capable of taking on such a job. That includes: Demand Media’s Joanne Bradford, who was also a former top Yahoo exec; Microsoft’s Yusuf Mehdi; OWN’s Kathleen Kayse; MLB.com’s Bob Bowman; and any number of Google execs.

In that regard, as with all the other search and advertising overhaul efforts at Yahoo, it is a matter of attracting serious talent into the company going forward.

More on that — and more — to come.

According to several sources, Yahoo is now on the hunt for a COO — with special emphasis on someone with turnaround experience — presumably to be a worker-bee No. 2 to product-guru CEO Marissa Mayer.

Several Silicon Valley execs and others outside of tech have been contacted by Spencer Stuart, the executive talent firm that is working on a number of other exec searches for Yahoo.

It is not clear if Mayer is on board this plan for a COO and other sources said she has different ideas for the management organization at Yahoo, including an elaborate general manager system that is similar to that at Google. Mayer, who come to Yahoo from the search giant, has put a lot of practices from her former employer in place, from free food to weekly all-hands meetings to more stringent hiring.

In any case, those candidates contacted recently have been told that the company is looking for a top exec with a focus on restructuring and also finance. Presumably, in this scenario, Mayer will focus on product and innovation — her strengths — while the COO would perhaps be responsible for making the trains run on time on the business side of Yahoo. A plethora of employees who have met with her have stressed her intense interest in products, which is mirrored by much less attention to more mundane business issues.

Perhaps the highest profile COO hire of a similar sort has been Facebook’s Sheryl Sandberg, who was brought in at a dicey time for the social networking site to work on the business while co-founder and CEO Mark Zuckerberg focused on its product.

Such an exec could be a good idea, since — despite the wide latitude Mayer has been given to make changes — Yahoo can not afford much damage to its current operations as Wall Street investors wait for her strategy to reinvigorate the company.

In fact, a recent filing in which Yahoo said Mayer was rethinking its promise to return a $4 billion-plus cash windfall from the sales of assets in China to shareholders caused the stock to drop quickly, largely due to a decided lack of information about what she planned to do with the money.

It will be interesting to see who would be intrigued by the mammoth job of helping fix Yahoo, since most think the process will inevitably include major layoffs.

Spencer Stuart’s Jim Citrin worked on the troubled tech giant’s recent CEO search, which ended up in the hiring of the high-profile Google exec. Mayer’s hiring was a public relations coup for Yahoo’s board, especially its large shareholder Dan Loeb of Third Point.

Mayer herself has also been reaching out to her extensive circle of colleagues at Google and elsewhere in tech to come help her turn around Yahoo. Most recently, she has been trying to hire a former Googler Katie Jacobs Stanton, who once worked with Mayer and now runs international efforts for Twitter.

At the same time, several top execs have left Yahoo since Mayer arrived as she conducts a house cleaning and puts her own team into place. That has included its former interim CEO Ross Levinsohn and HR head David Windley. More such departures are expected.

Mayer has also kept execs, including making interim general counsel Ron Bell the permanent one last week. She has also relied heavily on Yahoo co-founder David Filo.

But her new hires have mostly been lower-level ones, made up of staff who had been close to her at Google.

I would ask for comment from Yahoo, but one of those Mayer newbies at Yahoo — Anne Espiritu, who appears to be a ghost — is still sitting on a number of my and other reporter’s requests to comment on various issues that have been completely unanswered. I have now decided to move onto the other two — Patricia Moll Kriese and Andrew Schulte — to see if they disappear too.

David Windley

As I reported earlier today, new Yahoo CEO Marissa Mayer is shaking up the human resources unit at the company.

Consider it shook and definitely not stirred: Leaving the company, by mutual agreement, is its longtime head David Windley, several sources said.

Also out is his No. 2 exec, several sources said, talent acquisition head Grant Bassett. Both have been replaced by another Yahoo HR exec Kristen Robinson on interim basis. (In another big HR departure, international head Marc Ketzel just left for a top HR job at Samsung.)

Windley’s tenure has included a huge brain drain at the Silicon Valley Internet giant and a series of layoffs at Yahoo, as well as an ongoing musical-chair series of top leaders.

Yahoo, keeping with a spanking new policy of non-communication, has not returned an email seeking comment.

Windley’s leaving comes as exactly no surprise, since Mayer has arrived and taken control of its culture and recruiting, which have basically boiled down to making a Yahoo version of the search giant. Before taking the top job at Yahoo, Mayer worked at Google for her entire career.

As I wrote earlier: “While free food and better swag have attracted attention, Mayer has also plunged into the recruiting arena aggressively. She is now reviewing all new hires personally — another steal, um, borrow, from Google — and has also begun to require a much more stringent set of standards.

That has included the requirement of the addition of solid college grade-point averages and a preference for higher-level educational institutions for incoming resumes.”

Windley follows former interim CEO Ross Levinsohn out the door as Mayer begins her house-cleaning of the current crop of exec at Yahoo, while searching her her own team.

Mayer is reaching out to a number of execs outside the company, including Twitter exec Katie Stanton, as well as perusing at a series of start-ups to bring new people into the company.

She has made two hires of mid-level execs from Google — both of whom have been described to me as longtime Mayer loyalists. But she has still to pull in a big name or deeply experienced exec to her team.

We’ll be watching for that, of course, as well as who’s next to go in this game of “10 Little Yahoos.” Several sources at the company said that they expect Mayer to replace almost the entire current executive team, from its CFO Tim Morse on down.

David Windley

According to sources close to the situation, active new CEO Marissa Mayer has turned her focus on the troubled Silicon Valley Internet giant’s human resources unit.

It is now headed by David Windley, whose tenure has included a huge brain drain and a series of layoffs at Yahoo, as well as an ongoing series of top leaders.

Yahoo, as has become its new practice, has not returned an email seeking comment.

Some in the company think a big shakeup is coming, which could include Windley’s departure.

He could stay too, but it is clear his new boss will be in his business much more than previous CEOs.

That is probably no surprise in the wake of the hiring of Mayer. The former Google exec has instituted a series of quickfire changes across the company related to its culture and recruiting, which have basically boiled down to making a Yahoo version of the search giant.

While free food and better swag have attracted attention, Mayer has also plunged into the recruiting arena aggressively. She is now reviewing all new hires personally — another steal, um, borrow, from Google — and has also begun to require a much more stringent set of standards.

That has included the requirement of the addition of solid college grade-point averages and a preference for higher-level educational institutions for incoming resumes.

Windley has been at Yahoo through a long series of CEO musical chairs and has been criticized internally for the talent loss and also its series of layoffs at Yahoo.

While none of this is his fault specificially, Windley is the person, according to its Web site, in charge of “driving Yahoo!’s worldwide strategies around talent, culture and organization effectiveness.”

Which has not been very effective — thus, the Mayer scrutiny.

If he left, Windley would follow former interim CEO Ross Levinsohn out the door as Mayer begins her house-cleaning of the company and looks to put her own team in place.

Mayer is reaching out to a number of execs outside the company, including Twitter exec Katie Stanton, as well as perusing at a series of start-ups to bring new people into the company.

The publisher plans to tell its workers today that it will fire 50 of its 170 employees, according to people familiar with The Daily’s plans.

The move comes 18 months after the tablet newspaper’s high-profile launch, and a little more than a month after News Corp. announced plans to split itself into an entertainment company and a newspaper company. (News Corp. also owns this Web site.)

Employees who produce the paper’s editorial page and sports coverage will be heavily hit by the layoffs, and The Daily will run skeletal versions of those sections from now on. (Update: There won’t be a freestanding editorial section at all, the Daily says (below).) But the cuts will affect other parts of The Daily, including its design and production staff.

News Corp. officials have publicly defended The Daily, which News Corp. CEO Rupert Murdoch thought would serve as a template for newspapers’ transition to the tablet era. Murdoch’s team worked closely with Apple and its late CEO Steve Jobs to produce a publication initially tailored for the iPad.

But while Daily executives say they now have more than 100,000 paying subscribers for its iOS and Android editions, the paper hasn’t been able to live up to Murdoch’s expectations, and the money-losing publication has been under scrutiny since launch.

Earlier this month, following reports that News Corp. was considering shutting The Daily down, Editor-in-Chief Jesse Angelo told his staff to ignore “the haters.” But in a memo, he suggested changes were coming:

This is the truth about the modern media business — all outlets, including the ones writing about us, are under pressure to prove themselves as businesses. We are no exception, and to be sure, we will need to continue to evolve, adapt and change in order to compete and be successful.

The cuts come at the same time as News Corp. examines costs at other properties in its newspaper portfolio, in advance of its corporate divorce. News Corp.’s flagship Dow Jones unit, which publishes The Wall Street Journal, has quietly been letting go of some of its business executives; last month, Dow Jones shuttered the print edition of its SmartMoney personal finance magazine.

In addition to the layoffs, The Daily will try to save money in other ways. For instance, it will no longer create digital pages that work in both vertical and horizontal layouts, and will produce only vertical pages from now on.

But people familiar with the paper’s plans say it isn’t changing other parts of its strategy, including a recent move to produce a weekend edition.

Update: Here’s a memo from Angelo, and here’s the press release.

The Daily Announces Content Changes, Staff Reorganization

New York, NY, July 31, 2012 – The Daily, News Corp’s daily national news publication built exclusively for tablets and touchscreen devices, today announced content and personnel changes at the publication designed to streamline its production, focus resources on its most popular features, and reflect the changing business environment for news and media.

The implemented changes to The Daily include the following:

Ø A total of 50 full-time employees, 29 percent of the full-time staff, will be released.

Ø The Sports and Opinion sections, which saw the lightest traffic, are being reorganized. Sports reporting will now be provided by content partners, like Fox Sports, while existing features like photo galleries and the ability to track favorite teams via a customizable sports page will remain. The Daily will no longer have a standalone Opinion section. Opinion pieces and editorials will appear in the news pages, clearly marked, from time to time as appropriate.

Ø The Daily will move to a portrait-only orientation – the mode in which the vast majority of its readers view content – though video will still be viewable in landscape mode.

Ø The Daily will continue to invest in the content its readers use the most: original reporting, strong visual elements, great photography and video, award-winning design, infographics, and interactivity. These are the features that continue to make The Daily unique and that have seen heaviest traffic; they will make up a greater percentage of each edition going forward.

“These are important changes that will allow The Daily to be more nimble editorially and to focus on the elements that our readers have told us through their consumption that they like and want,” said Editor-in-Chief Jesse Angelo. “Unfortunately, these changes have forced us to make difficult decisions and to say goodbye to some colleagues who have worked hard to make The Daily successful. These moves were driven by the needs of the business. The Daily is the first of its kind, and it remains the best of its class. We are still in the infancy of this innovative new media platform, but we have delivered excellent content, steadily increasing readership, quality reporting, and award-winning design. Our standards will not diminish as we move forward, nor will our enthusiasm for creating an outstanding daily digital publication.”

“We continue to believe in the future of tablet publications because we know the market for tablets and touchscreen devices will only expand,” said Publisher Greg Clayman. “As more and more people buy and use tablets in their daily lives, The Daily will grow with them. We have consistently remained one of the top-ranked paid news apps since our launch, we have steadily grown our subscriber base, and we have the world’s largest media and publishing company behind us. Like all good digital products, however, we must change and evolve to remain fresh, competitive and sustainable.”

And for good measure, a quote from News Corp.:

The changes announced today at The Daily will enable the business to operate more efficiently and with even greater focus on the types of content that consumers have gravitated towards since its launch. News Corporation remains committed to The Daily, and the publication will continue to be an important part of our leading portfolio of publishing brands going forward.

Yahoo’s board has hired Spencer Stuart in yet another CEO search, although sources close to the company said that interim leader Ross Levinsohn is the prime candidate for the position at this point.

“It’s Ross’s to lose,” said one person close to the situation.

Levinsohn was appointed to the job on a temporary basis after the Silicon Valley Internet giant’s last CEO, Scott Thompson, was ousted after a resume-padding controversy.

At the time, the board indicated that there would be a search, although Yahoo Chairman Fred Amoroso said in an employee meeting that he was hoping Levinsohn would get the job.

Still, the move by the company’s directors could add more uncertainty to the already volatile mood at the Silicon Valley Internet giant, which has been rocked by a series of major changes in recent months.

Along with the Thompson fracas and a massive layoff, the board has had a massive turnover — including adding activist shareholder Daniel Loeb of Third Point and two of his colleagues, Michael Wolf and Harry Wilson.

Interestingly, all of the 11 directors are considered independent, according to a proxy filing Yahoo made earlier today.

And — in my humble opinion — they are also all pretty aggressive in their interest in helping run Yahoo beyond the typical board’s job of overall corporate governance.

Case in point: Several board members, along with Levinsohn, have been involved in serious negotiations to settle its patent infringement litigation with social networking giant Facebook.

Oh, it’s a very mouthy group — which is likely to give pause to any experienced exec who Spencer Stuart might query about the very difficult job of turning around Yahoo. (I truly feel for anyone who runs Yahoo, what with listening to all that expected backseat driving and kibitzing.)

The selection of Spencer Stuart is interesting, given that Heidrick & Struggles had done Yahoo’s previous search. But that talent search firm had gotten into it with Thompson, who accused Heidrick of adding a fake computer science degree to his bio. Heidrick vehemently denied the allegation.

The board members of the nominating committee in charge of the search are David Kenny, John Hayes, Thomas McInerney and Wolf. Kenny, who was once considered a Yahoo CEO contender (he now is CEO of the Weather Channel), is chair of the group.

Until we get some clarity, here is Yahoo’s proxy filed today, with all kinds of interesting info to chew on:

YHOO-20120604-DEF14A-20120712

Yahoo’s embattled CEO Scott Thompson (pictured here) is set to step down from his job at the Silicon Valley Internet giant, in what will be dramatic end to a controversy over a fake computer science degree that he had on his bio, according to multiple sources close to the situation.

The pair will apparently say he is departing for “personal reasons.” Sources said that Thompson will be claiming to be leaving due to a serious illness that he recently discovered he had.

But the evolving crisis — which is just over a week old — centered on his botched resume and how he handled the thorny issue is the key reason for the abrupt end to his tenure as a CEO.

Thompson’s likely replacement on an interim basis will be Yahoo’s global media head Ross Levinsohn, who most recently also ran its Americas unit, including its advertising sales.

In addition to the management upheaval, Yahoo’s board is closing in on a settlement with the man who discovered Thompson’s misstep, activist shareholder Daniel Loeb of Third Point, said sources.

The situation could change, since Yahoo’s full board still has to meet this morning to officially approve the sweeping changes at the long-troubled company.

But, if it is, this development goes a long way toward fixing some of what has been ailing Yahoo recently.

And it’ll also be a stunning victory for Loeb (pictured here), since the pugnacious hedge fund investor is set to get three board seats from a slate proposed by him as part of a proxy fight aimed at Yahoo. The new Yahoo directors will be media exec Michael Wolf and turnaround specialist Harry Wilson. Loeb’s fourth selection — former NBC head Jeff Zucker — will withdraw.

The five current Yahoo directors — who were to step down at the company’s annual meeting this summer — will leave the board effective immediately, sources said, to make way for the Third Point selections.

Finally, Yahoo’s recently added director Fred Amoroso will be named chairman of the board.

Amoroso is the director who has been conducting the investigation into the issues raised by Loeb about how the fake academic credentials got in Thompson’s public bios, as well as in Yahoo’s regulatory filings, and also the hurried circumstances around his hiring in January.

Those mysteries — read, screw-ups — might never be solved now, although Thompson made a convoluted attempt to explain it all in two awkward employee meetings at the end of last week. In those gatherings, according to numerous sources, he blamed a headhunting firm for introducing the mistake when he was being hired for a job at eBay in the mid-2000 timeframe.

That company, Heidrick and Struggles, slapped back last week with an internal memo, noting that Thompson’s claim was “verifiably not true.” Sources said that Heidrick told Yahoo’s board that it was in possession of a resume that Thompson had apparently submitted showing the inaccurate CS degree on it.

That memo, impugning Thompson’s credibility, was one of many that piled on to create an impossible situation for the Yahoo board, related to his leadership ability going forward.

Thompson had also previously issued a Yahoo statement, in which he apologized for the “distraction” caused by the problematic resume, but not for the mistake itself.

And, initially, Yahoo — under his direction — had called the borked resume an “inadvertent error.”

Such fumbling to fix the situation was among the many other issues that the board has been considering relating the ability of Thompson to remain in his job. Also of importance was the sinking morale of Yahoo employees, who had largely rejected Thompson’s excuses in the ResuMess scandal.

Internal message boards at Yahoo lit up all last week, with staffers largely rejecting his explanations. In addition, a number of top execs and engineers approached the board calling for Thompson’s firing.

While that’s not precisely what happened here, it’s close enough to describe Thompson’s departure as inevitable.

All this change comes in the wake of a massive restructuring he was in the midst of at Yahoo, after 2,000 employee layoffs.

Thompson was pushing forward a vision of adding a much more significant data and commerce element to Yahoo’s largely ad-based business.

That is likely to be less stressed under media-focused Levinsohn, who will be essentially trying out to be the permanent CEO.

Well known in the media and advertising communities, he has worked at a number of big online efforts over many years.

According to his bio at Yahoo, where he arrived in 2010:

He previously served as the President of News Corporation’s Fox Interactive Media, where he was responsible for the day-to-day operations, strategy and acquisitions that helped transformed the company into a leader in digital media. He also held senior management positions with AltaVista, an early pioneer and leader in search, CBS Sportsline where he oversaw all content and development for the top rated sports site, and HBO where he launched and oversaw a unit developing new programming and revenue streams. Levinsohn also was the co-founder and managing director of Fuse Capital, an investment and strategic equity management firm focused on investing in and building digital media and communications companies.

Levinsohn sits on the board of Freedom Communications and the Bogart Pediatric Cancer Research Program. He holds a Bachelor of Arts in Communications from The American University.

So far in my checking, Levinsohn’s resume is accurate.

More to come, obviously.

I have emails and texts and calls into everyone for comment, but apparently they are all out at a Mother’s Day brunch (except me).

RELATED POSTS:

• Yahoo’s Parting With Thompson Will Be for “Cause” (a.k.a. CSLie)
• Ross Levinsohn’s Yahoo Plan: Back to the Future
• Here’s New Yahoo CEO’s First Note to Troops! (The Leaking-Internal-Memos-to-ATD Policy Remains in Effect As Usual)
• Yahoo Officially Confirms ATD Report on CEO Changes and Proxy Settlement
• Meet the Man I Call “The Hair”: The Video Stylings of Yahoo’s Newest CEO Ross Levinsohn
• Will Thompson’s Ouster Mean a Yahoo-Facebook Patent Settlement Too?
• Exclusive: Yahoo’s Thompson Out; Levinsohn In; Board Settlement With Loeb Nears Completion
• Heidrick & Struggles Slaps Back at Thompson’s Yahoo in Blame Game Over ResuMess
• Is He In or Is He Out? Crunchtime for Scott Thompson at Yahoo.
• Not So Scott Free? Yahoo’s Other Big Shareholder — Cap Re — Leaning Toward Supporting Loeb Over Thompson ResuMess.
• Tech Nation’s Gunn Says She and Yahoo CEO Discussed Their CS Degrees Before 2009 Show (Video and Audio)
• Loeb Calls Again for Thompson Firing From Yahoo, as Former eBay Boss Supports Him
• Place Your Bets: Will Loeb Drop Another Bomb on Yahoo at Vegas Confab Later Today?
• Exclusive: Yahoo Director in Charge of Botched CEO Vetting to Step Down From Board
• CEO Says Sorry to Yahoos for Borked Bio “Distraction” — But Will Mea Culpa Work Without an Apology for Error? (Memo)
• Buffett Comments on Trust Issue in Yahoo CEO BioGate: “You’ve Got a Problem”
• Loeb Lobs Lawsuit, as Expected, at Yahoo’s Borked Bio Mess
• As Yahoo CEO Reaches Out to Top Staff, Board Meets to Weigh “Options” (I.E., Deciding Who Gets to Take the Borked Bio Blame)
• Yahoo Should Expect Incoming Lawsuit Lobbed by Loeb Tomorrow on CEO Hiring
• They Shoot Yahoo CEOs, Don’t They? But Not Without a Really Smoking Gun and a Much Stronger Board.
• Yahoo’s Thompson Asks Employees to “Stay Focused” — Except Not on Him
• In 2009 Interview, Yahoo CEO Does Not Deny He Has a CS Degree, and Calls Himself an “Engineer” (Audio)
• Yahoo’s Board Will “Review” Resume Discrepancy of CEO
• How Did a Phantom CS Degree Get on CEO’s Bio in SEC Filings? Yahoo’s Not Saying.
• Yahoo’s Response on CEO’s Computer Science ResumeGate: “Inadvertent Error”
• Dan Loeb Alleges “Discrepancies” on Yahoo CEO Scott Thompson’s Resume Related to Computer Science Degree

Earlier today, Yahoo’s persistent thorn, activist shareholder Dan Loeb of Third Point poison-penned another letter to the board of the Silicon Valley Internet company, demanding that Yahoo fire its new CEO Scott Thompson, as well as director Patti Hart, over bizarre inaccuracies related to their academic achievements.

“Permitting Mr. Thompson and Ms. Hart to stay with the Company after apparently violating the Code of Ethics sends a message to all Yahoo! employees that a different set of rules applies at the top,” Loeb wrote.”[Yahoo must] terminate Mr. Thompson for cause immediately given his demonstrable unsuitability to remain Chief Executive Officer and a director of Yahoo! and accept the resignation of Ms. Hart for similar reasons.”

And while many across the blogosphere — including some very clever tweets — called for his head tout de suite, that’s just not going to happen.

At least for now, at this early point in a controversy over Yahoo filing legal documents that misrepresented Thompson’s long-ago degree from Stonehill College.

In a nutshell: Thompson does not have a computer science degree, as he had maintained he did in public bios for almost a decade, a falsehood that mysteriously seeped into documents Yahoo filed with the Securities and Exchange Commission.

That’s bad news for Yahoo, for sure, on many levels, but moving against Thompson at this moment is not likely to be the answer — for the short term, at least.

That’s due to many reasons, that I like to think of it as three hopelessly complex puzzles that need solving pronto.

The What-Did-Yahoo-Know-and-When-Did-It-Know-It Question

There is no question the first thing Yahoo’s board needs to do is a thorough investigation to determine how a borked bio could proliferate so widely and for so long.

Most importantly, Yahoo will have to reveal if Thompson actually gave them this incorrect information, as he aggressively lobbied for the then-open CEO job.

As I had previously reported several times, Thompson cold-emailed a Yahoo director — Intuit CEO Brad Smith, as it turns out — despite not being on the list of potential candidates. Thompson was then shuttled over to Hart, who was running the vetting process with the help of headhunting firm Heidrick & Struggles, and hired within weeks.

Oddly, sources said Thompson never filled out the required informational papers for the job, nor did Heidrick conduct the normal background check on him. Instead, another forensic firm Yahoo hired did the work.

If it turns out Thompson gave any of them the bad bio info, it would be quick curtains for him.

But if Yahoo’s board members obtained his info on their own, the next key query would be how no one at Yahoo — especially its legal and compliance staffers, as well as outside help — managed to catch the problem during the vetting of Thompson.

Here are some good questions to start with:

Who put a faux computer science degree on Thompson’s bio in the first place, why and when did it happen?

Where did Yahoo get the inaccurate information?

Who was in charge of checking Thompson’s academic record for Yahoo?

And, who checked the work of the checkers?

The problem is made more complicated, because correct information was easily available in the SEC filings of eBay for years, since Thompson was head of its PayPal payments unit.

While the resume information was indeed wrong on eBay’s Web site and on numerous bios of Thompson for years, how did eBay legally get it right while Yahoo did not?

That calls into question the expertise of the company, its directors and those they hired to make sure execs were completely on the up and up, a task they clearly failed at.

If rank incompetence is the reason, which it looks like it might be, expect certain board members and other Yahoo staffers to go, along with anyone who helped in the Thompson vetting, or lack thereof.

Unless, of course, the gang-that-couldn’t-shoot-straight actually did shoot straight and some one at Yahoo found out about the educational discrepancy before the new CEO was announced, but declined to fix it.

While sinister, such a scenario is not entirely implausible, given how much pressure Yahoo was under at the time to hire a CEO quickly, due to Loeb and his looming proxy fight.

If any evidence were to surface that this was so, it is curtains all around, which would rain the kind of disaster down on Yahoo’s Sunnyvale HQ that would make Loeb’s attacks look like a Nerf battle. Instead, it would be “The Hunger Games” — except that no one survives.

The Chaos-in-Sunnyvale Conundrum

Which brings us to the profound implications of Yahoo jacking its second CEO within six months.

While it’s easy to yell “Fire the CEO” on a crowded Twitter, it’s simply not so easy in practice.

How long did it take Yahoo’s lugubrious board to figure out Carol Bartz needed to go? A … long … time. (And, she had a CS degree!)

More to the point, Thompson — and his not-so-merry band of consultants from Boston Consulting Group and, this week, McKinsey & Company — has only just completed a massive layoff of 2,000 employees and a jarring restructuring of management.

He’s also in the early stages of rolling out a new and decidedly still-squishy strategic plan to top execs (also just this week), along with working on some other key initiatives.

That includes renegotiating its search partnership with Microsoft; noodling around on a possible deal with Google; contemplating the sale of a variety of assets; and — oh, yes — trying to take on social networking Godzilla Facebook over patent infringement.

Busy much?

But, most importantly, Thompson is now the umpteenth Yahoo CEO to be working on the never-ending talks with its Asian partners over selling back a piece of the company’s lucrative stake to them.

While Yahoo CFO Tim Morse and head lawyer Mike Callahan are the point men on the deal, the lack of CEO would be an issue in the now-proceeding again talks.

This is a sale that must — and I underscore must — get done and soon, giving Yahoo much-needed breathing room and a whole lot of cash to fork over to increasingly disgruntled shareholders.

So, expect Yahoo to try to milk that deal for all it’s worth in the coming week, in order to give the appearance, at least, of positive forward momentum.

And, like it or not, Thompson has to play a key role in it getting done.

Thus, the likelihood of wait-and-see over point-and-shoot on Thompson is higher than you might think.

That’s especially true given four members of the board are leaving within six weeks and have either or are in the process of being replaced by new members.

Then, Thompson will be their problem to solve.

Again, no small thing, since the old crew — led by feckless Chairman Roy Bostock — is not likely to want to end its appalling tenure with yet another disaster.

Such a move would further tarnish the legacy of its outgoing directors, although I am not sure how it could be any more sullied, given their consistent record of one bad decision after the next.

What do I really think? I think this cursed board will maintain its 100 percent score of doing the wrong thing at the right time.

It could be a different case with the new directors, of course, who all seem pretty sharp and not as easily impressed by a record of failure.

They will surely be monitoring Thompson carefully, as will employees, who have taken to internal message boards with a rage not seen in a while over the resume debacle.

Their morale might be one uncertainty impacting Thompson’s fate. If a lot of key employees continue to bolt Yahoo or those remaining more loudly express their disdain for the bio antics, the new directors might listen.

The Whatever-Loeb-Says-We-Won’t-Do-Till-Later Head-Scratcher

Which brings us back to Loeb, whose noisy campaign to grab seats on the Yahoo board has certainly hit home this week.

And, though Yahoo likes to ding him a lot, since he started his campaign of terribly entertaining investor terror, a lot of what he’s been calling for has happened.

That includes a major flushing of the board — with five longtime members, including co-founder Jerry Yang, going, going and gone.

In addition, Loeb brought pressure to slow down some questionable deals, from Yahoo’s PIPE dream to a tax-free spinoff in Asia in a deal only an accountant could love.

He’s also — though they try to deny it — got the Yahoo directors in the dangerous habit of reacting to him, rather than playing their own game.

While the Yahoo board has resisted any deal with Loeb (pictured here), blaming him for rejecting their kind offers of settlement, it is he who is setting the tone more than Yahoo.

And that tone is of alarm and trouble and chaos at Yahoo.

That’s not going to work to convince other Yahoo investors to back his cause — in fact, Loeb has a decidedly uphill battle to win his proxy challenge — he has still scored a direct win with the bio relevations.

So far, though, Loeb has not sunk Yahoo’s battleship, so it is unlikely the board will acquiesce to his latest demand of Thompson being fired by noon on Monday.

Maybe it will eventually, or maybe it will just scold Thompson or maybe it will do nothing at all.

All that is an unknown — a riddle, wrapped in a mystery, inside an enigma, with a lot of managerial incompetence thrown in. And that, most of all, is the sad definition of today’s Yahoo.

RELATED POSTS:

• Yahoo’s Parting With Thompson Will Be for “Cause” (a.k.a. CSLie)
• Ross Levinsohn’s Yahoo Plan: Back to the Future
• Here’s New Yahoo CEO’s First Note to Troops! (The Leaking-Internal-Memos-to-ATD Policy Remains in Effect As Usual)
• Yahoo Officially Confirms ATD Report on CEO Changes and Proxy Settlement
• Meet the Man I Call “The Hair”: The Video Stylings of Yahoo’s Newest CEO Ross Levinsohn
• Will Thompson’s Ouster Mean a Yahoo-Facebook Patent Settlement Too?
• Exclusive: Yahoo’s Thompson Out; Levinsohn In; Board Settlement With Loeb Nears Completion
• Heidrick & Struggles Slaps Back at Thompson’s Yahoo in Blame Game Over ResuMess
• Is He In or Is He Out? Crunchtime for Scott Thompson at Yahoo.
• Not So Scott Free? Yahoo’s Other Big Shareholder — Cap Re — Leaning Toward Supporting Loeb Over Thompson ResuMess.
• Tech Nation’s Gunn Says She and Yahoo CEO Discussed Their CS Degrees Before 2009 Show (Video and Audio)
• Loeb Calls Again for Thompson Firing From Yahoo, as Former eBay Boss Supports Him
• Place Your Bets: Will Loeb Drop Another Bomb on Yahoo at Vegas Confab Later Today?
• Exclusive: Yahoo Director in Charge of Botched CEO Vetting to Step Down From Board
• CEO Says Sorry to Yahoos for Borked Bio “Distraction” — But Will Mea Culpa Work Without an Apology for Error? (Memo)
• Buffett Comments on Trust Issue in Yahoo CEO BioGate: “You’ve Got a Problem”
• Loeb Lobs Lawsuit, as Expected, at Yahoo’s Borked Bio Mess
• As Yahoo CEO Reaches Out to Top Staff, Board Meets to Weigh “Options” (I.E., Deciding Who Gets to Take the Borked Bio Blame)
• Yahoo Should Expect Incoming Lawsuit Lobbed by Loeb Tomorrow on CEO Hiring
• They Shoot Yahoo CEOs, Don’t They? But Not Without a Really Smoking Gun and a Much Stronger Board.
• Yahoo’s Thompson Asks Employees to “Stay Focused” — Except Not on Him
• In 2009 Interview, Yahoo CEO Does Not Deny He Has a CS Degree, and Calls Himself an “Engineer” (Audio)
• Yahoo’s Board Will “Review” Resume Discrepancy of CEO
• How Did a Phantom CS Degree Get on CEO’s Bio in SEC Filings? Yahoo’s Not Saying.
• Yahoo’s Response on CEO’s Computer Science ResumeGate: “Inadvertent Error”
• Dan Loeb Alleges “Discrepancies” on Yahoo CEO Scott Thompson’s Resume Related to Computer Science Degree

Yahoo just released a statement that its board will “review” today’s revelation that the bio of its CEO Scott Thompson contained an error related to his educational achievements and will make “appropriate disclosure” about what happened.

On both the Web site and in the regulatory filings of the Silicon Valley Internet giant, Thompson is described as having a degree in both computer science and accounting from Stonehill College.

He does not have a degree in computer science from the Boston-based school, but does have a Bachelor’s of Science in Business Administration (Accounting).

Yahoo said in full in its statement:

“In connection with the statement the company made earlier today about Scott Thompson, the Yahoo! board will be reviewing this matter, and upon completion of its review, will make an appropriate disclosure to shareholders.”

Earlier today, Yahoo first blamed the issue on an “inadvertent error” — but provided no further details — which sources said did not sit well with the board.

“Many members of the board are deeply concerned,” said one person with knowledge of its thinking. “This is a problem on a lot of levels, especially related to the trust of shareholders.”

Indeed, especially since the news came to light via activist shareholder Dan Loeb of Third Point, who is agitating for board seats via a proxy fight.

Loeb’s efforts to impugn Thompson appear to have caused some level of damage, at least in terms of perception about the level of vetting that was done when the former president of eBay’s PayPal unit was hired earlier this year.

In fact, the error has been around for a half-dozen years, which begs the question of why Thompson never noticed it.

While his bio on filings made by eBay to the Securities and Exchange Commission were accurate, the one on the online commerce site’s Web site incorrectly said he had a computer science degree.

It is not known who introduced the error there.

But the inaccuracy moved inexplicably to both Yahoo’s corporate Web site and also its SEC filings, and the company declined to provide any details earlier today as to how that happened.

It’s not clear what happens next, or if there are any legal implications, beyond a needed correction by Yahoo with the SEC — which already took the entire line about Thompson’s education off his Web bio today.

As I wrote earlier today:

Thompson himself is probably not at risk unless it can be definitely proved he was the one who misrepresented having the degree in the first place. He can simply say he had no idea who added it to the eBay Web site and that he did not notice it there on the Yahoo Web site and SEC filings.

While that makes him look careless, how big a deal it becomes with shareholders, as well as Yahoo employees, is also an unknown. While a computer science degree is not a requirement for a CEO of a tech company — both Facebook’s Mark Zuckerberg and Microsoft’s Bill Gates dropped out of college and did pretty well in computer science anyway — tech resume padding, even inadvertent, is not a characteristic that is going endear Thompson to anyone.

The controversy could not have come at a worse time — Thompson was actually in meetings all day yesterday and today with senior staff, following recent layoffs of 2,000 and a massive restructuring, to discuss plans for moving the long-troubled company forward.

And besides the proxy fight, he is also dealing with selling off Yahoo’s Asian assets, renegotiating a new search deal with Microsoft, and also trying to figure out what parts of Yahoo to keep and what parts to jettison to improve its prospects.

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Earlier today, Yahoo released a letter talking itself up to investors, introing a new Web site called Yahoo Forward to do more bragging and — you guessed it — giving yet another smackdown to activist shareholder Dan Loeb of Third Point.

The move comes as the proxy fight over the Silicon Valley Internet giant moves ever closer to its annual meeting, which is set to take place sometime this summer.

In the letter, which had precisely zero new news, Yahoo recounted again that it tried hard to settle things with its disgruntled shareholder, but underscored its desire not to have Loeb on the board.

Why? Because the man who owns about six percent of Yahoo — which is about 99.99 percent more than any other current board member, which seems to make him pretty interested in Yahoo’s fate — is not qualified to be a director.

“The board continues to believe that Mr. Loeb himself does not bring the relevant skill set and experience to the board, particularly in comparison to the candidates selected by the board,” the Yahoo letter read. “In addition, we believe that, based on the specific qualifications of Third Point’s nominees relative to Yahoo!’s business and opportunities, the candidates nominated by the board’s Nominating and Governance Committee are significantly superior to those proposed by Third Point. “

Buuuurn! (Not really.)

Loeb has his own Web site, Value Yahoo, which he launched last month to pillory Yahoo. He used it today to post an infographic titled “The Incredible Shrinking Yahoo.”

Buuuurn! (Not really.)

In fact, the real fire could start as early as next week and in the months ahead when other Yahoo investors start to pick sides in the fight.

That should really begin when independent proxy advisory firm Institutional Shareholder Service gives its recommendation on the issue to Yahoo investors.

A backing by ISS for another prominent proxy advisor Glass Lewis will help Loeb, although he still has an uphill battle to convince other shareholders to vote down Yahoo, which has a new CEO in Scott Thompson and a mostly new board.

That will be even more difficult, given how active Thompson has been in making a ton of productive-sounding moves, such as a recent restructuring which included 2,000 layoffs. While results will not be in for a while, a lot of we’re-hard-at-work strategery noise is probably a good tack for Yahoo.

The company will surely try to drop some more Yahoo bombs on Loeb to burnish its chances in the coming month — most likely first around a taxable sale of a large portion of its Asian assets related to new rounds of talks now taking place again, which might include a fat dividend to investors.

(Investors like fat dividends and the people who give them fat dividends, by the way!)

The company could also sell off some of its underperforming units, such as its advertising technology business and renegotiate its search partnership with Microsoft, all of which will give Yahoo more of a case that Loeb’s complaints are now unfounded.

But don’t count Loeb out, either. He’s a deft campaigner and also deserves some credit for forcing Yahoo to make several of its recent moves to oust weak members of its longtime dysfunctional board.

In that regard, at least, Loeb has been very relevant.

Here’s Yahoo’s letter today, in full (the odd bolding is all done by the company):

Yahoo! Shareholder Letter Outlines Forward Momentum and Urges Election of Its Board Nominees

SUNNYVALE, California, May 2, 2012 — Yahoo! Inc. (NASDAQ: YHOO), the premier digital media company, today released the following letter to all shareholders from its board of directors:

Dear Shareholder,

Since last August, Yahoo! has moved forward aggressively, implementing a plan to position itself for future success and to increase the value of Yahoo! for you, our shareholders.

* Just four months ago, we appointed CEO Scott Thompson, a highly accomplished and dynamic leader with the experience and expertise required to lead Yahoo! to renewed growth, innovation, and success. Scott is already moving the company forward fast — dramatically reorganizing the business around its core strengths with a mindset of focus, speed, discipline, and putting the customer first.

* The company has reconstituted the board of directors, with the optimal mix of expertise, experience, and fresh perspectives to accelerate the company’s transformation. We recruited five new, highly qualified independent directors through the Nominating and Corporate Governance Committee’s thorough search process. In addition, four of our directors volunteered not to stand for re-election at the 2012 shareholders’ meeting. As reconstituted, following the annual meeting a majority of Yahoo!’s directors will be new to the board this year, and all directors will have joined the board since 2010.

* Following a detailed and diligent review in an accelerated timeframe, the company produced a comprehensive strategic framework that will change what we do and, most importantly, how we do it to enable us to put our customers first in everything we do. We will deliver fun, engaging, and personalized experiences on all screens and forge strong relationships with our advertisers by producing measurable results, including consumer insights derived from our vast data, and delivering a higher rate of return on advertising spend. Specifically, we will focus all we do on the consumers who trust us to deliver personalized content and communications in our core businesses, and on the advertisers who want to connect with our consumers. Just as importantly, we are identifying what we will no longer do, in order to direct resources toward those businesses that generate the highest consumer engagement and the best return on our investment. As we excel in our core business, we will earn the right to pursue new growth opportunities.

* With this renewed operational focus, the company has defined a new organizational structure to support our core business and put resources closer to our customers. Effective May 1, Yahoo! will operate in three groups — consumer, regions and technology — all supported by our corporate teams. Each of these three groups will have clear accountability for getting results by delivering the best customer experiences. This more efficient structure will enable faster decision-making and more effective delivery of innovative products and services that measurably impact the bottom line.

* Beyond our core business, we are committed to continuing to be prudent stewards of our non-core assets and investments and to be thoughtful and diligent about monetizing their significant value at the right time and in the right manner. Should we do so, returning capital to shareholders will be a high priority.

In identifying qualified new members for the board, the Nominating and Corporate Governance Committee, led by its independent chairperson Patti Hart, conducted a thorough and impartial search process. Working with a leading executive recruitment firm and using the committee’s desired skill sets and experience for new board members, the committee identified over 100 potential candidates and sought input from a number of our major shareholders. Committee members engaged with over 20 individuals, including the four nominees proposed by Third Point. Committee members then conducted numerous in-depth interviews and carefully analyzed the qualifications of each candidate, including each of Third Point’s nominees. Committee members conducted additional interviews with those candidates that warranted further consideration, as determined by the committee in its meetings held throughout the process. Following completion of the full process, the committee and the board determined that the distinguished group of five candidates recently announced were the best choices, based on their individual accomplishments, experience directly relevant to Yahoo!’s business and its challenges, and records of value creation.

The new directors have strong records of significant accomplishment at the highest levels of media, advertising, marketing, Internet, technology, and finance, including corporate finance and restructuring, and insight into customers’ perspectives. The continuing directors are independent thinkers who bring impressive track records of success, and have been actively and constructively engaged as the company has developed its strategic framework to deliver renewed success and value to shareholders. We are challenging Yahoo!’s entire leadership team by asking tough questions, establishing rigorous goals, and developing a framework for strict accountability to move Yahoo! forward … fast.

Our focus now is on operating the company so that it delivers superior value to our shareholders. Supported by the many talented people who have contributed to charting our new course and inspired by the many shareholders, customers, and employees who have communicated passion for this great brand, we know that we will succeed.

Regrettably, our efforts to avoid a proxy contest with Third Point were unsuccessful. Following the recommendation of the Nominating and Corporate Governance Committee, we offered Third Point two board seats, including one of its nominees and a second mutually agreeable candidate, which would bring Third Point’s perspective into the boardroom. Unfortunately, Mr. Loeb declined to end his proxy solicitation on that basis, insisting that there could be no settlement unless he was personally appointed to the board. The board continues to believe that Mr. Loeb himself does not bring the relevant skill set and experience to the board, particularly in comparison to the candidates selected by the board. In addition, we believe that, based on the specific qualifications of Third Point’s nominees relative to Yahoo!’s business and opportunities, the candidates nominated by the board’s Nominating and Governance Committee are significantly superior to those proposed by Third Point. Nevertheless, we want to emphasize that we remain committed to an open dialogue with all our shareholders and to working in a constructive manner with Third Point.

At the end of the day, we recognize that you, our shareholders, will make the decision as to the board you want to lead your company. We are confident that when you assess our new board’s qualifications against Third Point’s slate, you will come to the same conclusion that we did—that this is the right board with the right mix of skills and experience to lead the company forward to create value for shareholders. We also recognize that we have a great deal of work to do to support and challenge the management team to move the company forward fast. We intend to keep ourselves and the company focused and we do not intend to let ourselves be distracted from the work at hand.

Yahoo! is looking forward, focused on delivering superior value to all of our shareholders. We are building momentum with a great leadership team, unified in focusing the company on its core strengths, redeploying resources to the most productive areas of the business, and equipping the company to invest in growth and innovation. Your new board includes individuals who have proven operating expertise in media, advertising, marketing, Internet, technology, and finance, and have consistently proven to be thoughtful and responsible stewards of shareholder value, with a strong emphasis on disciplined capital allocation and a willingness to embrace structural change. They are already contributing to the rigorous action plan to realize Yahoo!’s potential and deliver increased value for shareholders.

With new leadership and the new board, we are building a stronger, nimbler, more profitable Yahoo! that is better equipped to innovate for our customers and will ultimately increase the value of Yahoo! for all shareholders.

You can read more about Yahoo!’s actions to move the company forward and create shareholder value at http://yahooforward.com.

Thank you for your support.

Yahoo! Board of Directors

Yahoo beat Wall Street estimates in its first-quarter earnings report today, with revenue of $1.08 billion and earnings of 23 cents. That’s a gain of 28 percent from a year ago in net earnings and 38 percent per diluted share.

Analysts had been expecting Yahoo to report revenue of $1.06 billion and earnings of 17 cents a share. But, as I reported earlier today, sources had indicated that the results would be on the upside.

Still, revenue was only up year over year by 1 percent — not exactly a great achievement, given exploding growth across the Internet industry. The real drag was the Europe, Middle East and Africa regions, whose revenue was down 9 percent — which Yahoo attributed to the weak economy there — with its “contribution” down 27 percent. That region has been run by Rich Riley, who is now Yahoo’s sales lead in the U.S.

One interesting note: While display revenue was down, search revenue was up. And unique visitors to Yahoo were up 7 percent, which was lower growth than in previous quarters. The reason was declines in search and communications, with media up strongly.

Now, investors are hoping to get more clarity from new CEO Scott Thompson in a call at 2 pm PT about the overall strategy for the troubled Silicon Valley Internet giant, which just restructured its management again and also had layoffs of 2,000 employees.

Thompson has yet to articulate a specific plan beyond the broad strokes of media, commerce and data/platforms as Yahoo’s aim.

But there is a lot more to deal with and in detail, including figuring out its troubled advertising search partnership with Microsoft, the talks around selling off parts of the company’s lucrative Asian assets, Yahoo’s patent lawsuit against Facebook, how Yahoo is going to deal with activist shareholder Third Point’s possible proxy challenge and whether more layoffs beyond recent firings will be needed.

“In the first quarter, Yahoo!’s results came in at the high end of our guidance range and beat consensus on revenue and profits,” Thompson said in a statement. “We also made changes to resize the organization and establish a new leadership structure to quickly deliver the best user and advertiser experiences at scale.”

Until Thompson gives more deets on the earnings call, which I will be liveblogging, here’s Yahoo’s official press release and cool charts on the subject:

YHOO News 2012-4-17 General

YHOO_Q112EarningsPresentation

According to sources close to the situation, Yahoo’s Chief Product Officer Blake Irving has turned in his resignation and it has been accepted by the company.

The process for Irving’s departure is a bit more formal since he is a top officer at the Silicon Valley Internet giant. But it is perhaps not that surprising, given that a brunt of the 2,000 employee layoffs at Yahoo yesterday were in his part of the organization.

Irving has not been at Yahoo this week during those wrenching cuts — that’s because the resignation has been in the works for some time.

In fact, in a restructuring to be announced next week, the central product organization at Yahoo he runs was essentially blown up, with the development moving back into media, sales and consumer products units being planned.

In addition, Yahoo’s new CEO Scott Thompson has been contemplating selling off large parts of the company’s advertising technology platforms, as well as its search business, also now under Irving.

Irving had largely opposed the strategy that Thompson has been aiming toward, said sources, and also strongly disagreed with laying off so many employees without a clear plan in place. Many inside and outside Yahoo agree.

He was also apparently concerned about the massive engineering and research talent exodus of late, especially in Yahoo’s vaunted Labs arm, which suffered major cuts in the layoffs.

The former Microsoft exec has no plans for another job, said sources, but has had a number of offers.

Yahoo confirmed the resignation when I called to ask about Irving’s goodbye. “Yahoo wishes him all the success in the future,” said the spokesperson.

Irving came to Yahoo in mid-2010 under former CEO Carol Bartz, who was fired last fall. Under his leadership, the product unit had focused a lot on creating a major publishing platform for Yahoo and other media companies. He debuted its Livestand content app earlier this year.

Here is a video interview I did with Irving in happier times, talking about Yahoo products, in which he sported a very handsome blue cashmere sweater:

]]> http://allthingsd.com/20120405/exclusive-yahoos-chief-product-officer-blake-irving-resigns/feed/ 0 http://allthingsd.com/20120405/amid-worries-about-strategery-yahoo-ceo-scott-thompson-tries-to-soothe-the-savaged-troops-memo-time/ http://allthingsd.com/20120405/amid-worries-about-strategery-yahoo-ceo-scott-thompson-tries-to-soothe-the-savaged-troops-memo-time/#comments Thu, 05 Apr 2012 22:13:40 +0000 Kara Swisher http://allthingsd.com/?p=193710

Yahoo CEO Scott Thompson, who has developed a tough-talk reputation within Yahoo of late, went all sweet — well, less crabby, I guess — the day after the layoffs in which 2,000 employees were fired.

After dressing down top execs the night before the cuts by telling them the bad situation was due to their poor performance as leaders, his internal letter to the troops was also a bit cut-and-dried, with the not-very-sympathetic admonishment, “change is never easy.”

Not exactly what someone who just got their pink slip — or saw a close colleague get axed — likes to hear!

Today, Thompson opted to go with the softer side of Scott, in an internal memo I obtained titled “time to move forward.” It includes a promise to deliver a real strategic plan next week at an “All Hands” meeting. (I have previously reported that he was rolling out a new structure next week.)

Yahoo’s activist shareholder Third Point admonished Thompson yesterday for not having such a plan in place before making such widespread layoffs, which shed 14 percent of the workforce from the Silicon Valley Internet giant.

“While this action was unfortunately necessary and widely expected, Third Point, Yahoo!’s largest outside shareholder, is disappointed that this round of cuts occurred before CEO Scott Thompson has articulated his strategic plan for the Company,” it wrote in a letter (embedded below). “Shareholders deserve a management team and board who have a vision and strategic plan.”

Internally, there was also a lot of grumbling over the lack of a vision before the layoffs and worries that Thompson does not have a clear path for Yahoo.

“It’s like going into war and killing a big chunk of troops right before, without a plan in place about how to win,” said one person, in a common sentiment I heard from employees. “Everyone left feels shell-shocked and with no direction.”

In recent meetings about various options, including selling off a variety of Yahoo’s businesses, the former president of eBay’s PayPal payments unit has focused on a range of ideas, especially adding more commerce and data to the mix.

Apparently, all will be revealed next week, in what Thompson called “comprehensive plans for Yahoo!’s future.”

Thompson also did a little cheerleading:

“We can do this. We will do this! One thing I’ve heard repeatedly since I got here is that everyone wants to win again…I have seen big turnarounds before, and this company has the foundation, the spirit, the backbone, and the creativity to get it done,” he wrote. “Personally, I can’t wait to get moving.”

That’s good, because shareholders and employees have been waiting a long time for any forward momentum at Yahoo.

Here’s the memo below in its entirety:

From: Scott Thompson
Sent: Thursday, April 05, 2012 1:15 PM
To:
Subject: time to move forward…

Yahoos –

This was a tough week. Thank you all for supporting each other through a difficult time.

As hard as big changes like this can be, I was encouraged to hear support from so many of you who really understand our need to operate differently. That said, I also know many of you still have a lot of questions about where we’re headed and how fast we can get there. I shared a few thoughts in my note earlier this week and you’ll hear more at our All Hands next week.

We deliberately separated this week’s employee action from next week’s discussion of our strategy. The reason was simple: we felt it was only fair and respectful to those who are leaving and transitioning to take care of each of them before turning to our future.

Starting next week we will begin looking forward and our All Hands is just the beginning. You’ll be hearing a lot more from me and other leaders about our comprehensive plans for Yahoo!’s future. The immediate next step for all of us is to get clear on our goals, and then take action and move.

There’s a lot to do and that’s why I can’t stress enough that we all need to focus on getting stuff done. Getting stuff done is short hand for eliminating bureaucracy and barriers so we can all innovate as fast as our customers and the industry require. That’s pretty fast.

Our users want fun, informative, engaging experiences on all screens that they feel were designed just for them. Advertisers want it to be much easier to work with us and they want measurable ROI on their spending. We can do all that. But we won’t win by talking about the opportunity. We’ll win by putting our customers first, creating high-quality experiences, and iterating on them quickly. Great user and advertiser experiences are what will ignite excitement around our brand and get us growing again.

You’ll receive the official invite to our All Hands shortly and we want to know what’s on your mind in advance. If you have questions before we meet next week, please check Backyard for information and answers to your questions. If you don’t see the answers, please post questions on Backyard, or you can email questions directly to the leadership team.

We can do this. We will do this! One thing I’ve heard repeatedly since I got here is that everyone wants to win again. There is so much passion for Yahoo! — for what it was and for what we all believe it can be. Even after all you’ve been through, there’s a hard core crew of Yahoos who believe in this company and in its ability to thrive. I have seen big turnarounds before, and this company has the foundation, the spirit, the backbone, and the creativity to get it done.

Personally, I can’t wait to get moving.

Scott

And here’s the Third Point letter from yesterday:

TP April 4 Statement

Finally, here is a video of a “Reporters’ Roundtable” I did last week on CNET:

]]> http://allthingsd.com/20120405/amid-worries-about-strategery-yahoo-ceo-scott-thompson-tries-to-soothe-the-savaged-troops-memo-time/feed/ 0 http://allthingsd.com/20120404/its-official-yahoo-lays-off-2000-employees/ http://allthingsd.com/20120404/its-official-yahoo-lays-off-2000-employees/#comments Wed, 04 Apr 2012 13:22:13 +0000 Kara Swisher http://allthingsd.com/?p=192985

In a move that AllThingsD had previously reported was coming, Yahoo said it had laid off 2,000 employees, or 14 percent of the workforce.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” said Yahoo CEO Scott Thompson in a statement. “Unfortunately, reaching that goal requires the tough decision to eliminate positions.”

While Yahoo has had periodic layoffs over the years, this one is its most significant in its history, and will also result in another large-scale restructuring of the management organization. More cuts are also likely to follow in the months ahead, due to the reshaping of Yahoo.

The latest employee action is being pushed by Thompson, who joined the Silicon Valley Internet giant in January from eBay’s PayPal unit.

“Change is never easy,” he wrote in an internal email to Yahoo employees (it is below in its entirety), in a well-worn cliché I am dead certain few appreciated hearing today from the top leader.

At an internal meeting with top staff last night, Thompson — who has gotten what seems to be a well-deserved reputation for chewing folks out at Yahoo — was more direct with the execs gathered, berating them extensively for not delivering and getting the company to this sorry point.

Ouch, Scott! It’s Easter, so it might be time for some forgiveness. (And no more ranting about my reporting to those inside Yahoo, since I have been 100 percent accurate so far. FYI, will aim for 110 percent next week!)

Yahoo said it will save about $375 million with the cuts, incurring a $125 to $145 million pretax cash charge for employee severance in its second quarter. Before the cuts, Yahoo had 14,000 staffers and has many thousands more hired as contractors.

The layoffs touch all units of the company, but the hardest hit is the product division, which is headed by Blake Irving, as well as its marketing, research and international units. Yahoo gave no details on the layoffs other than the number.

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated, as I have previously reported. Possible scenarios include a sale or a joint venture transaction for both, which employ thousands of Yahoo staffers.

The layoffs tomorrow are not the end of the road in cutting costs. Along with the likely shedding of its ad tech and search businesses, Yahoo leadership is also looking at future cuts as it evaluates current businesses, which could lop even more employees off its roster.

That said, Yahoo will be doubling down in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

As wrenching as they will be today at Yahoo, the layoffs come as no surprise. Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

Along with the trauma of the layoffs, Yahoo is also facing two other tense face-offs externally. In one, activist shareholder Third Point is waging a proxy fight for board seats and stepped up the public pressure this week; and Facebook struck back hard at Yahoo’s patent lawsuit with a counterclaim of its own.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week. Thompson, along with outside consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said that Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Americas head Ross Levinsohn is pegged to run the media arm, which will also include its leads/commerce businesses, such as autos; Shashi Seth — who now heads search and marketplaces — is likely to run consumer products, which will include Yahoo’s communications and search businesses.

Yahoo has already been conducting a search for a new worldwide sales head, who will also be boss of the U.S., Asia and Europe, Middle East and Africa sales regions. Rich Riley, who was recently running EMEA, is reportedly the pick for U.S. sales; Rose Tsou, who is running Asia, would presumably stay put; Yahoo is looking for an EMEA sales lead.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

One big question mark is how Chief Product Officer Irving fits in the possible new org, in which the new units get control of their product development. Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.

But today, the focus is on the layoffs and letting go all those employees, many of whom have worked at Yahoo for years. Even if it will result in a stronger Yahoo, as Thompson promises, it is still a very sad day in Sunnyvale.

Here is a video on the topic that I did with the WSJ.com “Digits” show today, after the cuts were announced early this morning:

Here’s the entire terse statement from Yahoo:

Yahoo! Statement

SUNNYVALE, Calif. — (BUSINESS WIRE) — Yahoo! today confirmed that it is taking important next steps to reshape the company for the future.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal,” said Scott Thompson, CEO of Yahoo!. “Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they’ve contributed to Yahoo!.”

Yahoo! has a solid foundation — nearly 700 million users and thousands of advertisers that engage with Yahoo! properties regularly and trust the company with their data and their business. Through its restructuring efforts, Yahoo! intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win. Yahoo! has identified key parts of the business — a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers — where the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value. With a clear focus on profitability and growth, the company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products.

Today, the company will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition.

Yahoo! expects to realize approximately $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. The company may incur additional charges in connection with this action. More information will be provided about Yahoo!’s future direction in conjunction with the release of its first quarter financial results on April 17, 2012.

And here is Thompson’s memo to employees, stating the obvious and with nothing new from previous statements and internal memos:

Yahoos –-

Today we are restructuring Yahoo! to give ourselves the opportunity to compete and win in our core business. The changes we’re announcing today will put our customers first, allow us to move fast, and to get stuff done. The outcome of these changes will be a smaller, nimbler, more profitable Yahoo! better equipped to innovate as fast as our customers and our industry require.

Over the last 60 days, we’ve fundamentally re-thought every part of our business and we will continue to actively consider all options that allow Yahoo! to put maximum effort where we can succeed. As part of this process, I believe we have to focus to win in a select group of core businesses globally:

Core Media and Communications: Our content, media, and communications experiences must be best in class. That includes getting today’s core properties right and innovating on a next generation of great product experiences across all screens.∙

Platforms: We must make our core platforms and systems a genuine strength for Yahoo! — platforms that we can really leverage to support our massive scale, drive the deepest personalization, and boost speed to market.∙

Data: Our massive data sets must become a genuine competitive advantage for Yahoo!. We have to unlock the value in our data to allow us to really understand our 700 million users, encourage and win their engagement and trust, leverage everything they do with us to more fully personalize their experiences, and to give our advertisers the immediate insights they are rightfully demanding.

We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first -– and we are moving aggressively to achieve that goal.

Unfortunately, reaching that goal requires the tough decision to eliminate jobs, which means losing colleagues and parting with friends. Today, we will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or a phased transition. We value our people and for those who will be leaving, we thank you for all you have contributed to Yahoo!. We will treat all of our people with dignity and respect, providing resources to help manage through their transition.

Change is never easy. But the time has come to move Yahoo! forward aggressively with increased focus and accountability. Our values have always been about treating all Yahoos with dignity and respect, and today is a day to embrace those values. This is an amazing company with exceptionally talented people and I know we will all do our best to encourage each other through this difficult period of transition.

Scott

]]> http://allthingsd.com/20120404/its-official-yahoo-lays-off-2000-employees/feed/ 0 http://allthingsd.com/20120403/yahoos-layoffs-tomorrow-morning-of-up-to-2000-will-only-be-the-first-move-of-a-larger-purge-to-come/ http://allthingsd.com/20120403/yahoos-layoffs-tomorrow-morning-of-up-to-2000-will-only-be-the-first-move-of-a-larger-purge-to-come/#comments Tue, 03 Apr 2012 22:16:46 +0000 Kara Swisher http://allthingsd.com/?p=192483

According to sources close to the situation, Yahoo’s massive round of layoffs — which is likely to impact up to 2,000 employees — is just the tip of the proverbial iceberg that will hit the storied Silicon Valley Internet giant in the months to come.

Sources said Yahoo is currently planning to announce the cuts in staff in the early morning, just as the markets open. That could change, of course, but the cuts will definitely occur within the next two days.

The layoffs, which will touch all units of the company, are expected to hit hardest in the product division, which is headed by Blake Irving.

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated, as I have previously reported. Possible scenarios include a sale or a joint venture transaction for both, which employ thousands of Yahoo staffers.

Also set to be hard hit are Yahoo’s local businesses, as well as its marketing and research divisions. While still sustaining losses, its media units will not be as badly impacted. And it’s not clear how many employee terminations will be aimed at the company’s general and administrative staff.

The layoffs tomorrow are not the end of the road in cutting costs. Along with the likely shedding of its ad tech and search businesses, Yahoo leadership is also looking at future cuts as it evaluates current businesses, which could lop even more employees off its roster.

That said, Yahoo will be “doubling down” in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

But not tomorrow, which will be one of the tougher days in Yahoo’s long history of periodic layoffs. Newly installed CEO Scott Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

That is indeed the case, which is causing massive strain throughout the company, which now employs over 14,000 and has many thousands more hired as contractors.

Along with the trauma of the layoffs, Yahoo is also facing two other tense face-offs externally. In one, activist shareholder Third Point is waging a proxy fight for board seats and stepped up the public pressure this week; and Facebook struck back hard at Yahoo’s patent lawsuit with a counter-claim of its own.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week, which will create several major, soup-to-nuts units at the company. Thompson, along with consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Americas head Ross Levinsohn is pegged to run the media arm, which will also include its leads/commerce businesses, such as autos; Shashi Seth — who now heads search and marketplaces — is likely to run consumer products, which will include Yahoo’s communications and search businesses.

Yahoo has already been conducting a search for a new worldwide sales head, who will also be boss of the U.S., Asia and Europe, Middle East and Africa sales regions. Rich Riley, who was recently running EMEA, is reportedly the pick for U.S. sales; Rose Tsou, who is running Asia, would presumably stay put; Yahoo is looking for an EMEA sales lead.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

One big question mark is how Chief Product Officer Irving fits in the possible new org, in which the new units get control of their product development. Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.

Let’s hope that Yahoos who will be let go tomorrow find themselves with many new employment choices after the ax falls.

]]> http://allthingsd.com/20120403/yahoos-layoffs-tomorrow-morning-of-up-to-2000-will-only-be-the-first-move-of-a-larger-purge-to-come/feed/ 0 http://allthingsd.com/20120403/breaking-facebook-smacks-at-yahoo-with-patent-claims-of-its-own/ http://allthingsd.com/20120403/breaking-facebook-smacks-at-yahoo-with-patent-claims-of-its-own/#comments Tue, 03 Apr 2012 18:13:58 +0000 Kara Swisher http://allthingsd.com/?p=192686

Facebook has just taken strong aim back at Yahoo’s patent lawsuit with an answer and counter-claim filing of its own, alleging infringement over a number of issues.

“From the outset, we said we would defend ourselves vigorously against Yahoo’s lawsuit, and today we filed our answer as well as counter-claims against Yahoo for infringing ten of Facebook’s patents,” said Ted Ullyot, general counsel of Facebook. “While we are asserting patent claims of our own, we do so in response to Yahoo’s short-sighted decision to attack one of its partners and prioritize litigation over innovation.”

In its counter-claim filing involving 10 patents held by Facebook, the social networking giant said that Yahoo is infringing via a wide range of its offerings, including its homepage, content optimization, relevance engine, Flickr photo-sharing service and advertising throughout its huge site.

You know: The ads that make up most of Yahoo’s revenue.

In other words, Facebook CEO and co-founder Mark Zuckerberg does not like being poked by new Yahoo CEO Scott Thompson, especially on the eve of a $100 billion IPO.

You might have heard that Facebook is going public and it’s a big deal around Silicon Valley, which is why no one much liked Yahoo’s skunk-at-a-garden-party legal move two weeks ago.

Yahoo fired back at Facebook’s firing back, in a statement:

“We have only just received Facebook’s answer and counterclaims, but on their face we believe they are without merit and nothing more than a cynical attempt to distract from the weakness of its defense. As we have made clear from the outset, the unauthorized use of our patented technology is unacceptable and must be resolved appropriately. Other leading companies license these technologies, and Facebook must do the same or change the way it operates. We have proposed that Facebook join us in discussions to resolve the matter, but our overtures have been rejected. As a result, we are prepared to continue to seek redress through the courts.”

The new filing could not come at a worse time for Yahoo, which will announce thousands of layoffs of employees tomorrow morning, in a wrenching restructuring to revive its lackluster business.

In its legal filing, Facebook also pushed back on assertions in Yahoo’s initial patent lawsuit, noting that it denies that “[w]ithout Yahoo!’s achievements, websites such as Facebook would not enjoy repeat visitors or substantial advertising revenue.”

I think Facebook — which is sure to try to drag this thing out for a long, long time — just called Yahoo a tech loser.

Here is the full document:

FB_ANSWER_AND_COUNTERCLAIMS

More to come, obvi.

Here I am talking about the whole enchilada on WSJ Live’s News Hub.

]]> http://allthingsd.com/20120403/breaking-facebook-smacks-at-yahoo-with-patent-claims-of-its-own/feed/ 0 http://allthingsd.com/20120402/exclusive-yahoo-loses-associated-contents-luke-beatty/ http://allthingsd.com/20120402/exclusive-yahoo-loses-associated-contents-luke-beatty/#comments Mon, 02 Apr 2012 21:40:26 +0000 Kara Swisher http://allthingsd.com/?p=192357

In yet another high-level executive departure, top-level content exec Luke Beatty, the founder of the Associated Content unit that Yahoo bought several years ago for $90 million, is departing, according to sources.

Beatty’s move comes as the Silicon Valley Internet giant is preparing large-scale layoffs and a massive restructuring, which several sources said will begin mid-week.

It’s another blow for the company, given the entrepreneurial Beatty was the kind of exec that Yahoo desperately needs to keep if its media aspirations are to remain innovative.

While Associated Content — now called the Yahoo Contributor Network — has been integrated into the media offerings at Yahoo, other upcoming cuts in Beatty’s areas of management could be decimating.

The changes are due to a new initiative from new CEO Scott Thompson to turn Yahoo around after years of lackluster performance. The situation has been tense at the iconic company, made worse by an increasingly nasty proxy fight that is also looming.

]]> http://allthingsd.com/20120402/exclusive-yahoo-loses-associated-contents-luke-beatty/feed/ 0 http://allthingsd.com/20120330/yahoo-layoffs-set-to-begin-next-week-followed-by-restructuring-the-week-after/ http://allthingsd.com/20120330/yahoo-layoffs-set-to-begin-next-week-followed-by-restructuring-the-week-after/#comments Fri, 30 Mar 2012 16:00:38 +0000 Kara Swisher http://allthingsd.com/?p=191538

Yahoo is preparing to begin layoffs of what could be thousands of employees starting next week, according to multiple sources, and is then expected to announce a new restructuring of the company the week after.

The swirl at the Silicon Valley Internet giant has grown more intense this week, as new CEO Scott Thompson has brought in top management for a series of meetings both Tuesday and Wednesday to outline the plans.

What has emerged — although sources noted that Thompson and others communicating the pending changes said nothing was yet set in stone — is the picture of a drastically slimmed-down organization with a focus on media, advertising and new but unclear “future” initiatives.

First the layoffs: Sources said the cuts will be deep and mostly aimed at the product, research and marketing units of Yahoo, which are likely to take place Wednesday. The ultimate goal, said multiple sources, is to cut many thousands from Yahoo’s staff of close to 14,000 employees, which is actually much larger, due to contract workers not officially in its roster.

The entire cut will not take place at once, said sources, since Thompson and others are still trying to figure out how to dispense with its ad technology org and, potentially, its search business. He has been in discussions with both Microsoft and Google about this, although there are other possibilities, too.

Both these parts of Yahoo together have about 2,500 staffers, whose fate is not yet sorted out.

Also still baking is the new structure, although sources said it is most likely to be comprised of a global media division, one that encompasses Yahoo’s communications and search businesses, and ones focused on global and also regional sales. There could also be a small organization of about 50 aimed at future innovation.

Americas head Ross Levinsohn is the likeliest exec to run the media arm, while Shashi Seth — who now heads search and marketplaces — would be the obvious candidate for the the communications/search one.

Thompson has already been conducting a search for a new worldwide sales head, although one possible internal exec for the job could be Rich Riley, who was recently running Yahoo’s Europe, Africa and Middle East region.

It is not clear how Chief Product Officer Blake Irving fits in the possible new org, since much of the development could now move to the decentralized units.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

Thompson, along with consultants he has hired from the Boston Consulting Group, presented the possible plan in front of Yahoo’s senior execs on Tuesday. That was followed by more meetings with a wider range of top management yesterday, although Thompson was not as highly specific in these meetings.

In fact, according to a half-dozen sources, Thompson apparently grew somewhat testy in one of the gatherings, when asked if there was a strategy he was going to announce in more detail to the group.

(Dear Scott, these are very talented employees who love the company and who have been through the wringer and it’s not their fault that leadership has failed them, so it might be a good idea to treat them with as much respect as possible right now.)

More to come, obviously.

]]> http://allthingsd.com/20120330/yahoo-layoffs-set-to-begin-next-week-followed-by-restructuring-the-week-after/feed/ 0 http://allthingsd.com/20120328/third-points-loeb-to-yahoo-about-board-rejection-illogical-alice-in-wonderland-world/ http://allthingsd.com/20120328/third-points-loeb-to-yahoo-about-board-rejection-illogical-alice-in-wonderland-world/#comments Wed, 28 Mar 2012 17:45:31 +0000 Kara Swisher http://allthingsd.com/?p=190878

Third Point’s Dan Loeb, the activist Yahoo shareholder, fired back at the company today about recent board appointments that ignored his alternate slate of directors, in yet another colorful letter that compared the Silicon Valley Internet giant to the famous children’s book “Alice in Wonderland.”

And not in a nice way.

“Our view of the nomination process is further reinforced by your explanation on Sunday as to why I would not be an acceptable Director. You told me that the Board felt my experience and knowledge ‘would not be additive to the Board’ and that as Yahoo!’s largest outside shareholder, I would be ‘conflicted’ as a Director, wrote Loeb to CEO Scott Thompson. “Am I conflicted to advocate for the interests of other shareholders because we are owners of 5.8% (over $1 billion) of Yahoo! shares (unlike the non-retiring and proposed board members who have never purchased a single share of Yahoo! except for subsidized shares issued through option exercises and shares “paid” by the Company in lieu of fees)? Only in an illogical Alice-in-Wonderland world would a shareholder be deemed to be conflicted from representing the interests of other shareholders because he is, well, a shareholder too. This sentiment further confirms that Yahoo!’s approach to Board representation is “shareholders not welcome.”

We’re about to go down the rabbit hole, indeed, as the well-known New York hedge fund exec moves to significantly step up his proxy battle against Yahoo. While it will be a tough road for Third Point to attract enough investor support for his side, it’s still a noisy mess that Yahoo can ill afford, especially as Thompson readies significant layoffs as part of a major restructuring.

Here’s the full text of Loeb’s saucy letter:

TP March 28 Letter to CEO Thompson Re Board Negotiations

]]> http://allthingsd.com/20120328/third-points-loeb-to-yahoo-about-board-rejection-illogical-alice-in-wonderland-world/feed/ 0 http://allthingsd.com/20120328/yahoo-geddon-leaders-to-debate-layoffs-asset-sales-search-deals-and-more-today-as-a-major-restructuring-looms/ http://allthingsd.com/20120328/yahoo-geddon-leaders-to-debate-layoffs-asset-sales-search-deals-and-more-today-as-a-major-restructuring-looms/#comments Wed, 28 Mar 2012 15:02:15 +0000 Kara Swisher http://allthingsd.com/?p=190726

What is Yahoo?

While that has been the perennially unanswered question at the Silicon Valley Internet giant for many years, according to dozens of sources inside and outside the company, Yahoo’s leadership is now deeply embroiled in an intense — and sometimes very tense and fast-changing — debate over a number of critical issues about what is expected to be the most sweeping restructuring in its history.

Top executives at the company are conducting what is likely to be a lively all-day “offsite” meeting today (which is actually taking place on Yahoo’s Sunnyvale campus) to continue to discuss, among other things: How and where the company will make large-scale cuts in staff, which I have previously reported were coming and will perhaps be numbering in the thousands; which businesses to sell off and which to keep, including its ad tech unit; the correct structure for the reconfigured entity; and who will be left to run it all when it is all settled.

Also up for debate is the best course of a two-pronged effort — being led primarily by CFO Tim Morse and members of his corporate strategy team — to renegotiate its search and advertising partnership deal with Microsoft, while also engaging in active discussions with Google about it taking over Yahoo’s search business.

“Everything is on the table,” said one person. “And anything could be blown up by Scott.”

The Scott being referenced is new CEO Scott Thompson, who has become something of a whirling dervish since he arrived at Yahoo only three months ago from the top job at eBay’s PayPal unit.

If shaking up the place — as he has promised in public and internal statements, including a recent memo in which he wrote that “real change is coming” — was his aim, Thompson is certainly doing just that and more.

Along with immediately initiating a massive effort to figure out the best way to restructure the long-troubled and ever-meandering company and all that entails, Thompson has also been meeting players all over Silicon Valley for advice; stopping and then restarting negotiating discussions with Yahoo’s Asian partners, visiting major advertising clients; and engaging in talks with activist shareholder Dan Loeb about settling a looming proxy fight, while also packing the board with allies to help fend off said battle.

And, oh yes, he also took a little time out from his busy schedule to sue Yahoo partner Facebook for patent violations.

But the real action is the remaking of Yahoo in his image. To do so, Thompson has been furiously evaluating the entire company, with the help of Boston Consulting Group and a small group of execs, especially Morse.

While it is all still undecided, he seems to be leaning toward Yahoo as a drastically slimmed-down entity without a central product group and with a simplified structure that includes global units — such as media, commerce and sales organizations — which will again be in charge of the entire development of their offerings.

(I will note, since I have been covering Yahoo since near its founding, this is a structure that has been in place before. In other words, at least for dinosaurs like me, there is nothing new under the sun here.)

The changes being contemplated include, as I have written previously, the possible sale or drastic reconfiguration of its ad technology business, which will effect at least 1,000 employees. Another 1,500 involved in Yahoo’s search business will also be impacted, depending on talks the company has been having with Microsoft, as well as Google, about better monetization.

Such a structure brings up a lot of questions about how, and by whom, it will be run. To figure it out, Thompson has been evaluating — sometimes rather brusquely — his own top managers, as well as looking for new ones outside the company, such as a search for a chief marketing officer and other key positions.

Confused? Perhaps, but not for much longer, said multiple sources, as Thompson moves closer to delivering his answer to the what-Yahoo-is question.

Yahoo PR — by the way, it will not escape Thompson’s change machine, either! — declined comment.

]]> http://allthingsd.com/20120328/yahoo-geddon-leaders-to-debate-layoffs-asset-sales-search-deals-and-more-today-as-a-major-restructuring-looms/feed/ 0 http://allthingsd.com/20120319/vaunted-yahoo-techie-departs-for-microsoft-surprised-me-neither/ http://allthingsd.com/20120319/vaunted-yahoo-techie-departs-for-microsoft-surprised-me-neither/#comments Tue, 20 Mar 2012 03:29:01 +0000 Kara Swisher http://allthingsd.com/?p=188072

One of Yahoo’s most respected researchers, Raghu Ramakrishnan, who is the author of one of the most famous database textbooks, “Database Management Systems,” has left the Silicon Valley company to join Microsoft. He was also critical to the development of much of Yahoo’s personalization technology.

Sources said the chief scientist for search and cloud platforms at its Yahoo Labs unit will be a fellow on the software giant’s SQL team.

Ramakrishnan, who has been at Yahoo since 2006, is one of many key researchers to depart before what is expected to be a gutting of the company’s research division in upcoming layoffs and other cuts by new CEO Scott Thompson.

None of this exodus of high-level research talent comes as a surprise. Prabhakar Raghavan, the well-respected head of the Yahoo Labs unit and also recently its head of strategy, has recently left the company to take a job at Google.

Ramakrishnan came to Yahoo from a professorship at the University of Wisconsin-Madison. According to his bio from Yahoo, he was the “founder and CTO of QUIQ, a company that pioneered crowd-sourcing, specifically question-answering communities, powering Ask Jeeves’ AnswerPoint as well as customer-support for companies such as Compaq.”

A Yahoo spokesperson declined comment (but, trust me, it is true).

]]> http://allthingsd.com/20120319/vaunted-yahoo-techie-departs-for-microsoft-surprised-me-neither/feed/ 0