There's much to the good in this org chart. Ash Patel, a famously lazy old-time Yahoo mostly regarded for his time in the job, is nowhere to be seen in Yahoo's executive ranks, replaced by CTO Ari Balogh. He's still at Yahoo, but his new job is unclear. Hopefully he'll be out the door entirely soon. And CFO Blake Jorgensen, an ineffective hire made by former Yahoo president Sue Decker (he was her best man at her wedding), is also gone.

But there are too many holdovers. Michael Callahan, a general counsel who got founder Jerry Yang hauled in front of Congress and labeled a "moral pygmy" over Yahoo's outing of a Chinese dissident, whose own department generated a labor lawsuit by Yahoo's first black, female lawyer, and who blithely expressed optimism about a lucrative advertising deal with Google that antitrust cops end up shooting down, should not be holding his job. HR chief David Windley's faults are less public, but Yahoo insiders say they loathe him.

Finally, there's the new face Bartz has picked: Elisa Steele, Yahoo's latest chief marketing officer, who joines the company from NetApp. Like Bartz, Steele previously worked at Sun. For all the same reasons that people were dubious about Bartz's hire — she's a software and hardware saleswoman who's unfamiliar with Web products and online advertising — one might be skeptical of Steele's background. Instead of shoring up her weaknesses in those fields, Bartz has hired a clone.

For those who want to plow through Bartz's explanation of what that purple graphic means, here's her memo:

From: Carol Bartz
Reply-To: Carol Bartz
Date: Thu, 26 Feb 2009 09:02:49 -0800
To: "all-worldwide@yahoo-inc.com"
Subject: Our New Organization

Yahoos,

As I've gotten to know Yahoo! over the past several weeks, I've developed a
point of view on how our organization should be structured to set us up for
success.

Our goal is simple: to consistently deliver awesome consumer and advertiser
experiences, everywhere in the world we do business. Delivering great
customer experiences is everyone's job at Yahoo! – and each part of our
organization will have a clear role in making that happen every day.

The timing of this announcement is important. As soon as decisions were
made, I wanted you to know about them — even if that means we don't have
all the details nailed down yet. Yes, there's been a lot of speculation in
the media over the past few days … that's been a little frustrating, but I'm
not willing to speak publicly about decisions before they're final. Today,
they are — so I'll lay out our new organizational structure for you now.

I know you guys have reorg fatigue. Hang in there – our intention is to
leave this structure in place for two to four years. We'll continue to make
adjustments as needed, but we expect this core structure to stay put.

The structure outlined below will enable us to make big improvements in our
product quality and operational efficiency. Part of that is simplicity –
I'm frankly amazed at how complicated some things are here! We'll have much
clearer decision making and accountability. Product and regional teams will
share responsibility for revenue targets and expense management, but we'll
have one P&L, for which I'm accountable.

We will also be in a better position to really listen to and understand our
customers -both consumers and advertisers. I think we've gotten into the
habit of focusing internally too much and we sometimes forget who we're here
to serve. You'll notice that our management structure puts a renewed focus
on the customer, with stronger feedback loops across the company… and they
all come through me.

Also, as you know, no organizational structure is a substitute for
collaboration, communication and trust. We'll all need to evolve our
behavior a bit – as teams and as individuals – to make this structure work
the way it's designed.

So here's the overview, with the roles that will report directly to me. As
you'll see, some of our leaders are still to be determined. I know you'll
want more detail than what's below – you can learn more on Backyard:
http://backyard.yahoo.com/ourorg .

Products: We've combined Tech and Product groups under one roof, led by Ari
Balogh as EVP Products & CTO. Ari's charter is to deliver global products
that enable extraordinary consumer and advertiser experiences. Ari's direct
reports now include one leader for each product group – we've taken care of
the "two in a box" problem.

One important note: The Connected Life team has been integrated into various
parts of the new organization. Our mobile strategy remains a key part of
Yahoo!'s focus going forward and all of our product groups will own mobile
innovations. After leading Connected Life for four years, Marco Boerries has
resigned from the company to spend more time with his family in Europe. We
thank Marco for his important contributions at Yahoo!.

Regions: There are now two: North America and International. As I've said
before, international growth is critical for Yahoo!, which has become too
reliant on its U.S. business over the years.

The regions deliver Yahoo!'s products, programming and services to
consumers, partners and advertisers in local markets. They will partner
closely with the newly formed Regional Solutions & Products group in Ari's
organization to help drive a significant shift in how Yahoo! develops
products for different geographies. The goal is to have global platforms on
which regional product offerings are based.

The North American region — comprised of the U.S. and Canada – is led by
Hilary Schneider. The leader of our International region, to be hired soon,
will be responsible for a cohesive Yahoo! global strategy and seizing our
international growth opportunities. Until we determine who'll lead the
International region, Rose Tsou (Asia), Rich Riley (Europe) and Keith
Nilsson (Emerging Markets) will continue to report to me.

Marketing: Elisa Steele will be joining Yahoo! as our Chief Marketing
Officer (CMO), effective March 23. Elisa joins us from NetApp where she was
SVP, Corporate Marketing. Previous to NetApp, she held executive positions
in marketing at Sun Microsystems. Elisa will oversee our global marketing
strategy and provide direction for our marketing function. She'll bring
together the various Yahoo! marketing teams that have been spread across the
company. Reporting into Elisa will be Brand Marketing, Audience Marketing,
Corporate Communications, Insights, Policy & Privacy, Community Affairs and
related central teams. I'm delighted to have Elisa joining the team.

Customer Advocacy: As I said, we can do much better in hearing the voice of
the customer across Yahoo!, and incorporating what we hear into all of our
work day-to-day. We have opened a search for a leader, who will oversee
Customer Care and Ad Operations globally with the goal of improving how we
support Yahoo!'s users and advertisers. In the interim, these teams will
continue to report to Hilary.

Service Engineering & Operations: This new team is responsible for
delivering common technology services at scale, including application
management and infrastructure. No matter how cool our products are, the
customer's experience won't be great unless our applications consistently
deliver. Note that we're bringing Service Engineering together as one group
because these engineers bring expertise that is best applied horizontally.
Leading this organization is David Dibble, who joined Yahoo! in December.
David's team also will be accountable for delivering more effective
corporate IT systems.

Corporate Functions: Blake Jorgensen will be leaving Yahoo! and I am
searching for a new CFO. Blake will remain through a transition with his
successor, and I want to thank Blake for all of his great contributions to
Yahoo! over the past two years. Mike Callahan will continue to lead our
Legal team, and David Windley leads our Human Resources function. Joel
Jones joins the team as my Chief of Staff.

So that's the high-level view. These changes are effective immediately, but
we've got more work to do in filling out the structure of each group. In
the short term, this transition will be challenging for many of our people.
My executive staff will be working with their organizations as quickly as
possible to create further clarity. For example, we'll need to recast
budgets and adjust work areas so we have the right people working
side-by-side.

I want to thank all of you who've shared your ideas and views with me since
I arrived. Several leaders across Yahoo! came together to design this new
structure – I've been very impressed with their dedication to the right
outcomes, particularly how they've embraced the need to eliminate the silos
that have been a drag on this organization for so long.

I think this organizational structure has the potential to solve many of the
issues you've helped me better understand. Of course, new issues will
emerge. But I know we'll be aligned and nimble in tackling them together.

This is a tremendous, proud company with a powerful brand, great products
and a bright future. Now's the time to get more focused than ever on
delighting our users and advertisers. Let's show them how great Yahoo! can
be.

Carol

Yahoo acquired the 80 percent of online-advertising exchange Right Media it didn't already own for $680 million in 2007 — a jawdroppingly high sum which made former Right Media executive Brian O'Kelley giggle, since Yahoo had bought the first 20 percent at a $200 million valuation only months before.

If Yahoo executives think they overpaid, no one's holding it against Walrath. The acquisition is the centerpiece of Yahoo's strategy to turn the company into a central place for buying online advertising. Transforming Yahoo's ad-selling operations from a conventional salesforce which sold ads on Yahoo's websites to a marketplace where banners are traded like bushels of corn has been a particular obsession of Decker's.

Adman Scott Symonds, whose employer, whose AKQA agency brings clients to Yahoo's advertising, told us he hopes the rumor of Walrath's promotion is true: "Yahoo has made some integration moves, but I think Yahoo can be even more aggressive leveraging these network properties and exchanges they purchased." One Yahoo speculates that Walrath's move to headquarters could be bad news for Mark Morrissey, another SVP in charge of advertising product management. Judging by how Walrath coolly handles a dancing, singing, rapping man in a chicken suit in the video embedded below, he's well prepared for life at 701 1st Ave, Sunnyvale, Calif.:

• Loathed EVP Ash Patel will head up Global Products group.
• Global Partner Solutions EVP Hilary Schneider will oversee both ad sales and product development for the entire US region and be Patel's peer.
• Scott Moore, who runs the Yahoo Media Group, will report to Schneider. Though he has startup offers.
• Brad Garlinghouse will probably leave by the end of the summer.
• Yahoo Search’s Vish Makhijani will leave the company.
• Front Door head Tapan Bhat will either report to Patel in Global Products or bolt.
• Yahoo SVP for Strategic Alliances, Chris Bolte, will leave the company.

Fayyad, a commenter tells us, is planning to return to Microsoft, where he worked before Yahoo. Had Microsoft's bid for Yahoo succeeded, he likely would have been welcomed back; now Microsoft is getting him much more cheaply. (Bassel Ojjeh, who worked with Fayyad at Microsoft and several startups before joining Yahoo, will be promoted to fill Fayyad's spot, a tipster tells us — but how long will he stay without Fayyad?) Weiner is taking temporary gigs with two venture-capital firms — a likely prelude to a CEO job somewhere. If he ever entertained that ambition at Yahoo, he was clearly thwarted by Sue Decker.

Kara Swisher thinks that another reorganization is coming at Yahoo, one which would not have Weiner directly replaced by one of his underlings. That makes a sort of sense, at least in being predictable. Yahoo is famed for its perpetual reorgs, and a pending reshuffle would explain why Yahoo still hasn't said anything publicly about Fayyad and Weiner's exits. This next one, Swisher thinks, would put Decker ally Hilary Schneider higher up the food chain, and undo a split between Yahoo's sales and product groups — one that Decker herself instigated, in a push to move from her previous job as CFO to an operational role.

What will this accomplish? “It would be nice to have sales in the room now, as we develop services, instead of totally separate,” a Yahoo executive told Swisher. Nice, but not game-changing; rather, it would simply undo a mess Decker made on her way up.

A whole lot of noise, about a whole lot of nothing. Silicon Valley is built on the idea of change — but not change for change's sake. Developing new products, not new org charts, is what excites people here.

Even Zawodny, a longtime Yahoo loyalist, the type of person who describes himself as "bleeding purple," is leaving to do a startup. I believe him when he says his departure has nothing to do with Microsoft or Icahn. But it has everything to do with Yahoo.

Jerry Yang, CEO He'll be a large Microsoft shareholder after the deal goes through, so it's likely he'll get a board seat. And perhaps he'll get to keep the "Chief Yahoo" title.

David Filo, cofounder Might be named a Microsoft Fellow, working in datacenter operations — as he prefers.

Sue Decker, President Gone. There's no position Microsoft can give her that will suit her ambitions. Not to mention the hash she's made of things at Yahoo.

Blake Jorgensen. CFO Gone. Microsoft doesn't need another CFO, and he's a close Decker ally.

Ari Balogh, CTO Bad timing: Balogh just left VeriSign for Yahoo this week. If he'll settle for a title below CTO, Microsoft might grudgingly make room for him.

Marco Boerries, EVP, Connected Life Gone. He's widely disliked within Yahoo, and Microsoft already has plenty of mobile dealmakers.

Michael Callahan, General Counsel Gone. First, we fire all the lawyers.

Gregory Coleman, EVP, Global Sales Already announced his "retirement." Even more gone than he already was.

Usama Fayyad, Chief Data Officer A keeper. Microsoft needs better data analysis.

Qi Lu, EVP, Engineering Search A keeper.

Michael Murray, Chief Accounting Officer Gone.

Jill Nash, Chief Communications Officer Could stay. Microsoft desperately needs better PR in the Valley.

Ash Patel, EVP, Platforms and Infrastructure Division Gone. He's already checked out, insiders say, but it will take a takeout to dislodge him from his desk.

Libby Sartain, Chief People Yahoo Already rumored to be out.

Hilary Schneider, EVP, Global Partner Solutions Could stay, though she's a Decker ally. Microsoft lacks credibility with newspapers, Schneider's strong suit.

Jeff Weiner, EVP, Network Division Gone. Weiner, a Semel guy, has managed to hold onto his job against the odds. But he's not respected in Redmond.

In Millard, Yahoo had an executive who commanded her employees' respect and admiration. But she was brutally pushed out by Decker, in an episode that's still talked about — including Decker's laughably clumsy attempt at a reconciliation, a gesture undertaken purely for keeping up appearances. Decker is clearly a brilliant strategist — except when it comes to managing people, a field where she clearly struggles.

And her apparent second-in-command, Hilary Schneider, is little better. A memo to the staff announcing Kelley's departure ends with this note: "Thanks in advance for your continued focus." In other words, dear Yahoos, please stop looking for new jobs and speculating about who's next to go. Schneider, for form's sake, wishes Kelley "best of luck." She should have saved some for herself. And Decker.

"Revenue is down 10-15% in this group year over year," says one tipster, of the marketplace unit. As part of the reorganization, Weiner's getting most of those businesses back, except for Yahoo's job-listings site, HotJobs. But here's the rub. To do any moneymaking deals, Weiner's group will have to "partner" with Schneider. That's unlikely to go over well, given the clear rivalry between the two. So much for Decker's claims that the reorganization will speed decisionmaking.

Update on President Organization — CONFIDENTIAL and PLEASE DO NOT FORWARD.

Fellow Yahoo!s,

Over the past two months, Jerry and I and the rest of the management team have been taking a close look at our business - from top to bottom - and have been working hard to refine Yahoo!'s strategy and longer-term objectives. With that in mind, today I would like to tell you about a number of organizational changes that will help us achieve our goals to better serve our customers, accelerate the speed of making fast, smart decisions, and create cleaner lines of accountability across key leaders.

Building on the success that we have had in aligning our sales and distribution organizations around customers, rather than around advertising products like search and display, the two major changes we are announcing today are designed to take this to a higher level. They will also better align our resources and priorities focused on building key audiences.

First, we are placing responsibility for all of our "partners" - advertisers, agencies, resellers, publishers, ad networks, developers, or others — in a new division called, Global Partner Solutions (GPS), under the leadership of Hilary Schneider. This new group will be charged with creating, delivering and coordinating global best practices for solutions to all of our partners. Furthermore, this unit will have direct responsibility for our U.S. go-to-market efforts (i.e., sales, marketing and business development) across:

all ad formats, including search, display, video, mobile, listings, etc.
all online marketing objectives, including brand, performance, promotional, and
all customer types and sizes, including large enterprises, small online businesses, and local brick and mortar companies

Business development deals for Mobile and content the will continue to be led by Connected Life and the Yahoo! Network Division, respectively, and will work in close coordination with GPS.

Global Partner Solutions will be responsible for segmenting the business needs of our partners into actionable groups, understanding the needs of these segments and our ability to meet these needs, developing holistic business strategies to delight and surprise these segments, and executing on these strategies.

This approach will help us achieve faster, smarter decision-making and improved execution in support of better serving our customers. For example, we will be able to much more quickly identify and secure the ad inventory that best meets our advertisers' objectives and partner with advertisers that best meet our publishing partners' objectives as well as provide the most compelling experience to the vast audiences we reach.

Hilary is a strong executive with a tremendous track record of success - most recently in building the Yahoo! Publishing Network and spearheading the Newspaper Consortium deal - and I believe she is ideally suited to lead this effort.

The organizational changes that will accompany this change are to move Global Sales, the Online Channel, the Yahoo! Publisher Network, Corporate Partnerships and Hot Jobs under the single umbrella of Global Partner Solutions. Reporting to Hilary will be David Karnstedt - SVP, North American Sales; Jacki Kelley - VP, Sales Strategy; Dan Foehner - VP, Worldwide Sales Operations; Mark Rabe - VP, Cross Border Sales; Rich Riley - SVP, Online Channel Division; Todd Teresi - SVP, Yahoo! Publisher Network; Jim Schinella - SVP, Corporate Partnerships; and Jeff Kinder - SVP/GM, Hot Jobs.

As many of you know, Greg Coleman has been actively engaged in leading the integration of Yahoo!'s search and display ad sales teams and communicating the benefits of our more integrated capabilities to our major clients, who have been very receptive to this holistic approach. This integration is now well underway, and his leadership and expertise have helped enormously to effect a smooth transition. He and I have discussed for some time the need to further integrate Yahoo!'s capabilities in order to better support the needs of our key customer groups.

Therefore, with the decision to create this new Global Partner Solutions unit under Hilary's leadership, we mutually agreed that Greg would leave Yahoo! to pursue other opportunities. We are fortunate that he will continue to assist us in this transition through February, closely advising the team. We deeply appreciate Greg's contributions to Yahoo! over the past six and a half years, a period in which our advertising revenues have increased from $600 million a year to more than $6 billion, with substantial growth not only in the U.S. but in Europe, Asia and key emerging markets around the world. We wish him the best of luck in the years ahead.

The second major organizational change we are announcing today is that we are moving the properties in the Local Markets and Commerce Division (LMC), excluding HotJobs, from Hilary's organization into the Yahoo! Network Division under Jeff Weiner's strong leadership."As a key member of the executive team, Jeff has held a number of pivotal roles at Yahoo! including SVP of Search and Marketplaces where he oversaw a number of these properties. As a result, the transition to Network should be seamless. Jen Dulski will continue to lead Shopping, Travel, Auto, Real Estate and Local under Jeff and Anna Zornosa will continue to lead Personals. This move will drive further organizational alignment around our key audience properties and result in clearer accountability and faster, smarter decision-making and better integration overall. In addition, the engineering function will also moved to align with the product team and will report into Venkat Panchapakesan.

Also, in an effort to create better alignment with the core business units, we are moving Cammie Dunaway, CMO, and her Customer Experience organization to report to me.

As a result of these changes, my direct reports now include Hilary Schneider — EVP of Global Partner Solutions; Jeff Weiner - EVP of the Yahoo! Network Division; Marco Boerries - EVP, Connected Life; Toby Coppel - Head of Yahoo! Europe; Keith Nilsson - Head of Emerging Markets; Rose Tsou - Head of the Asia Region; a soon to be hired EVP — Marketing Products Division; Cammie Dunaway — CMO; Jeff McCombs - my Chief of Staff and VP, Business Management; and Greg Coleman (through February 2008).

I know there have been many changes at Yahoo! over the last few months, and I know that change is not always easy. But I greatly appreciate all of your patience, dedication and hard work. As we look to make Yahoo! the partner of choice for our customers and partners. I am confident that we are putting the right people in the right positions to focus on the right opportunities.

Congratulations to all.

Sue

The rumor makes sense. Coleman led Yahoo's big comeback in advertising in the early part of this decade. But equally, one could say, he's overseen the recent slowdown in banner-ad sales growth. He's been ridiculed recently for his comments about how digital marketers don't know how to reach teens — rather, some charge, Yahoo ad salespeople, under Coleman, don't know how to deliver teens to marketers.

Schneider, meanwhile, is a close ally of Yahoo president Sue Decker. Brought into Yahoo last September to oversee its listings businesses — a small area of operating responsibility given to Decker when she was still CFO — Schneider's authority has expanded alongside Decker's. She doesn't have a traditional ad-sales background, but perhaps Yahoo, by promoting her to run all of Yahoo's sales, CEO Jerry Yang and Decker are saying that a traditional approach isn't what's needed now.