Terry Semel: 'friendship will survive forever'

You read it here first. Unless you're one of the thousands of Yahoo employees who received this email, last night, from Terry Semel. In the email, the internet corp's CEO confirms that Panama, Yahoo's do-or-die attempt to match Google's in search engine advertising, will fall under Sue Decker, the management team's rising star. But the best line comes in Semel's farewell to Dan Rosensweig, the departing chief operating officer. "His passion, focus, and energy have helped make Yahoo! the #1 site on the web and a premier Internet advertising environment all around the world. Even more importantly, Dan and I became instant friends and I know that friendship will survive forever." The full internal memo, after the jump.

From: Terry Semel
Sent: Tuesday, December 05, 2006 5:59 PM
To: all-worldwide@yahoo-inc.com
Subject: Company Announcement, All Hands Wednesday at 10am (Pacific)

Yahoos,

At our Q3 All Hands meeting, I talked about focus and the need to ensure
we are properly aligned to execute against our strategic objectives. I
have spent many months in conjunction with key members of the management
team determining how we can effectively organize to ensure we are
meeting the changing demands of our customers and capturing the major
growth opportunities we see ahead for the Internet. Today, we are
taking an important step towards that goal by announcing a
reorganization that will align our resources with our mission and
strategic objectives so we can build deeper relationships, scale more
effectively to create better services and advertising experiences, and
increase the value of Yahoo! for all of our customers.

We will be holding a companywide All Hands meeting on Wednesday,
December 6th at 10:00am PST to further detail the plans outlined below
and I invite all of you to attend or tune in to the webcast.

In order to understand this reorganization, it's helpful to think about
the different phases of Yahoo!'s growth. In the first five years,
Yahoo! was about 'get big fast' in order to drive user reach and build a
global brand. When I arrived in 2001, we entered our second phase of
growth which was all about product focus. Now, we are entering the next
phase of growth, which I believe is customer focused. By having a more
customer-focused organization and delivering leading-edge experiences
for our most valuable audience segments, we will be able to also create
the greatest amount of value for advertisers and publishers both on and
off the Yahoo! network.

To accomplish this, the company will be organized into two operating
groups - one focused on Audience, the other focused on Advertisers and
Publishers - with both supported by a Technology Group. [Org Chart]

The Audience Group will be 100% focused on extending our lead in
engaging the most valuable global audiences by delivering leading
experiences - not just products — targeted at specific audience
segments. The Audience Group will build social media environments
across the Y! network, promote openness and enable access to Y!
services, further extend Y! into mobile and IPTV, innovate at a more
rapid pace, and ensure we take a leadership position in emerging
markets. We will be conducting an external search for the head of this
group and hope to have a hiring announcement soon.

The current business units that will become part of the Audience Group
are:

* Communications, Communities and Front Doors (CCF)
* Search and Social Media
* Yahoo! Media Group (YMG)
* Connected Life
* Corporate Marketing
* Consumer Insights
* International

The Advertiser and Publisher Group will create a full-fledged global
advertising network, creating marketplaces to meet supply and demand on
both Yahoo!'s valuable owned-and-operated network and across the entire
Internet universe. This group will lead the transformation of how
advertisers connect with their target customers and drive more value for
more advertisers and publishers. They will provide customer-oriented
solutions across all major segments; from large advertisers and
agencies, to small- and medium-sized business, to local advertisers and
resellers. We see a huge opportunity to leverage our size and scale,
industry-leading sales team, and audience insights to become the premier
advertising network, whether we are selling ads on or off Yahoo!-owned
entities. In the past year, we have begun to demonstrate our value as
an ad network through our early relationships with our search affiliates
and partnerships with the likes of ebay, Vodafone, and the consortium of
over 200 daily US newspapers. No other company is as well positioned to
achieve this goal because of our unmatched breadth of both customers and
services. The Advertiser and Publisher Group will be headed by Sue
Decker, who has been an important contributor to the company's business
strategy, has been responsible for setting and managing all aspects of
financial and administrative direction, and has overseen the Yahoo!
Marketplace business unit. With Sue moving into this new leadership
role, we will begin a search for a new CFO right away.

The current business units that will become part of the Advertiser and
Publisher Group are:

* Yahoo! Search Marketing
* Ad Systems
* Global Media Sales
* Sales Ops
* Next Generation Advertising Platforms
* Marketplaces
* Small Business

The Technology Group, headed by Chief Technology Officer Zod Nazem, will
continue to support the entire organization. Yahoo! will concentrate
key engineering talent and shift investment towards the development of
high-impact, scalable, global platforms and architecture to help capture
the most significant long-term growth opportunities. For example, the
group will be chartered with leveraging Yahoo!'s platform investments in
community to create new social media environments, with the aim of
getting every user on the Yahoo! network to participate. In addition, it
will speed the development of innovative, next generation advertising
platforms beyond Panama to support the expansion of Yahoo!'s global
advertising network. The Technology Group will include a Platforms and
Infrastructure Division to ensure funding and execution of strategic
platforms and to attract world-class platform talent.

These three groups will work together to help Yahoo! execute against our
mission: To connect people to their passions, their communities, and
the world's knowledge. This new mission statement forms the basis for
how we will operate in 2007 and beyond. Additionally, we have four
strategic objectives that all Yahoos should be focused on:

1) Expand customer centricity: Develop rich experiences for each
audience segment and deliver solutions to meet the needs of all
advertisers and publishers worldwide. We will organize our services
around audience segments and advertising customers, rather than around
products.

2) Lead the social web: Leverage our strong positions in social
media/community, communications and media content across our global
network to create leading social media environments that encourage every
user on the Yahoo! network to participate through tagging, reviewing,
posting photos/video, etc.

3) Deliver next generation advertising platforms: Extend our
industry-leading breadth of offerings to give the largest breadth of
advertisers every opportunity to connect with audiences on and off
Yahoo!.

4) Drive organizational effectiveness and scale: Recruit and
retain the best industry talent and focus its resources on high-impact,
network-wide platforms to help capture the most significant long-term
growth opportunities.

Dan Rosensweig has been a key architect of this reorganization and had
decided that after helping to lead us through a transitional period, he
will be leaving Yahoo! to take the next steps in his very successful
career. Dan was the first external executive I hired upon joining
Yahoo! and the results he has generated demonstrate just what a
tremendous addition to the company he has been. His passion, focus, and
energy have helped make Yahoo! the #1 site on the web and a premier
Internet advertising environment all around the world. Even more
importantly, Dan and I became instant friends and I know that friendship
will survive forever. On behalf of the entire company, I want to thank
Dan for everything that he has done for Yahoo!. He will be missed and
we wish him even greater success and happiness in the future.

Yahoo!'s opportunity is bigger than it has ever been. Thirty billion
dollars of advertising will be coming online globally over the next five
years and no one is better positioned to take advantage of this than
Yahoo!. We have the largest and most engaged audience in the world and
we are the clear #1 in graphical advertising and #2 in search
advertising. With our renewed focus and a realigned organization, we
will be able to provide our audiences, advertisers, and publishers with
the best possible experiences and value.

Sue, Dan, Zod, Jerry and I look forward to speaking in greater detail
about this announcement at Wednesday's All Hands meeting. I encourage
all of you to tune in to the webcast or attend in person to hear more
about these changes and what they mean for Yahoo!.

- Terry

Contact information for this author is not available.