Internal “Peanut Butter” memo at Yahoo points to malaise

November 19, 2006 | Matt Marshall | Comments | |

Garlinghouse.bmpBrad Garlinghouse is the Senior Vice President at Yahoo, and runs Yahoo Mail. He has written a memo sharply critical of Yahoo, and it has been leaked to the WSJ. In it, he says Yahoo is adrift:

We have lost our passion to win. Far too many employees are “phoning” it in, lacking the passion and commitment to be a part of the solution. We sit idly by while — at all levels — employees are enabled to “hang around”. Where is the accountability?

His memo is a long one, but here is the crux, in his recommendation #3:

3. Execute a radical reorganization
a) The current business unit structure must go away.
b) We must dramatically decentralize and eliminate as much of the matrix as possible.
c) We must reduce our headcount by 15-20%.

I emphatically believe we simply must eliminate the redundancies we have created and the first step in doing this is by restructuring our organization. We can be more efficient with fewer people and we can get more done, more quickly. We need to return more decision making to a new set of business units and their leadership. But we can’t achieve this with baby step changes, We need to fundamentally rethink how we organize to win.

An accompanying WSJ article says Yahoo COO Dan Rosensweig has asked Garlinghouse to head a group to look into issues raised by the memo.

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Matt Marshall is editor and CEO of VentureBeat. Follow him on Twitter at @mmarshall, and follow VentureBeat on Twitter at @venturebeat.

  • actually, bureaucracy aside, i think they just need to fix the monetization problem. that, and step on the gas on the acquisitions.

    if they do those 2 things, the rest of it will be just fine.
  • Martin Seebach
    Interesting, that the COO asked him to do something about it. This shows that there is hope for Yahoo!. In many other big corporations, the CEO would launch investigations (hello, HP) into who leaked the memo, and the actual contents of it would simply drown.
  • Despite formidable competition - small and large, nimle and monolithic - Yahoo! is not to be underestimated. It has the means, talent and now the catalyst to change.
  • As an outsider looking in, I think Yahoo! is and will remain one of the leading web companies. They've had a good run with their current organization, but need to restructure, a natural progression as they've turned into a mature company.

    I think as long as Yahoo! realizes they are a destination site and web service provider, they'll do fine. Google won search, but Yahoo won a lot of other things (mail, entertainment services, etc) that are substantial businesses in their own right. At the end of the day, Yahoo has a more diverse business than Google, and just needs to become smarter about making money off its properties.
  • Mat Cowden
    'b) We must dramatically decentralize and eliminate as much of the matrix as possible'

    Surely dramatically decentralising and eliminating the matrix are oxymoronic, by decentralising you are if anything increasing the number of points in the matrix, no?
  • _____________________________________________

    ///
    As a result, the employees that we really need to stay (leaders, risk-takers, innovators, passionate) become discouraged and leave. Unfortunately many who opt to stay are not the ones who will lead us through the dramatic change that is needed.

    _______________________________________________

    That is total bull, the Web 2.0 Start-up acquisitions that Yahoo has been aggressively buying are in fact services created by people with those types of attributes...so in a sense, why re-invent the wheel. Take the best available from what has already been tested, and use your huge resources to tweak and market them.

    Surviving in a huge corporation, means that most people will be followers - there is just a very very very tiny percentage of people who can become and survive being risk takers and leaders and NOT step on the egos of the most powerful who are insecure and egotistical enough as it is. They would be seen as a threat. :-(

    And would entry-level PEOPLE WITH THOSE PERSONALITIES EVEN GET PAST THE INTIAL INTERVIEW WITH HUMAN RESOURCES - or the Department Managers where they would be working


    Heavily experienced people with those attributes are VERY AMBITIOUS - and unless there was a fast route to the top , would more likely want to start their OWN businesses and become millionaires with their brilliant ideas. ;-)

    And, with all of the emphasis on research - few people would be allowed to be risk takers- because the corporate world and the hungry viral media will expose and inflate any failure .... immediately effecting stock and public relations :-(
  • car insurance jamestown new yo
    Nice work chief ;-)