What does Yahoo’s latest reorganization all mean, especially in light of the situation with Microsoft still being up in the air? Like yesterday’s assertive letter to shareholders defending its Google deal, Yahoo is trying to show that it is getting on with its life, thank you very much.
The announcement is clearly aimed at squashing any lingering hopes for a new Microsoft deal to emerge. I spoke today with Yahoo’s chief technology officer Ari Balogh, who says:
The signal you should take from this is we believe most of that is over. We need to run this for the long term. While the board was considering the Microsoft deal, it would have been foolish to do a major reorg.
There is some wiggle room there. (He said “most of that is over” not “all”). But Yahoo has to act independently and shore up its resolve going into its shareholder meeting on August 1.
The main goal of the reorganization is to separate product development (all the Yahoo properties and services that consumers use) from advertising sales. It makes sense as far as it goes, but is not a terribly new idea. Most media companies separate the development of their content from the selling of their content. So Yahoo is acknowledging what everybody knows—that it is in fact a media company.
The products and content that it makes, though, are technology products. And that’s where Balogh’s group comes in. (As CTO, he oversees all the hardcore engineers in search and elsewhere that support, but are separate from, the new product group under Ash Patel). Balogh is standardizing technologies and development platforms across Yahoo in a major push to make Yahoo more open. Separating out product groups from the business side, he says, will “accelerate our open and social strategy” and allow good ideas to bubble up faster, even if they won’t make money in the short term.
Yahoo is also standardizing Yahoo’s internal cloud computing platform across its different properties into one consistent set of technologies. (Apparently, it is still a hodgepodge across different parts of Yahoo). Will Yahoo open up its cloud computing infrastructure to outside companies and compete with Amazon’s Web Services or Google’s App Engine? Balogh hints as much, and more:
That decision has not been made, but Yahoo will use it. One thing we will do is open it up in a different way. When we do, you will be surprised by how much we make available to the world.
It is clear that he wants to open-source parts of Yahoo’s infrastructure. He is also making all of Yahoo’s API’s and apps work on a consistent development framework. All of this is supposed to lead to deeper engagement with developers and ultimately killer products.
And maybe it will. But Yahoo still has some bigger questions to resolve about its future. It may want to signal that it is ready to move on past its dalliance with Microsoft, but some of its biggest shareholders are not quite there yet.
I’d love to see Yahoo! open-source part of its platform. Would be a good move for Yahoo!.
Aristotle? Is this guy’s name for real?
Could his parent been any more pretentious than to name their kid, Aristotle!
What happened to their other CTO who was all pro BSD. That guy gave legitimacy for running non-SUN or IBM OSes on a major site and in a way paved the way for low cost servers that google followed and now most site run on LAMP. Now, that was visionary!
A fresh crew to bail out the same sinking ship.
You can’t really move past a deal that is sitting squarely in front of you. I applaud the desire but we need to accept reality here : Yahoo screwed up, Google and Microsoft won, and Yahoo is unable to pull itself out of its hole by itself, despite being a big player (it’s a big hole). Yahoo, with an experienced management team couldn’t do it before the current mess. Why do we think now they can with lower morale and empty org chart?
Wiggle room and resolve is EXACTLY what I as a Yahoo shareholder don’t want to hear : I want to hear about huge structural changes, game changing strategies, a quest for the moon backed up by a massive show of resources/energy towards that goal. But Yahoo won’t be able to pull itself together for probably three – six months : months extremely critical in this calendar year given the importance of Q4 revenue.
How am I going to see my share value go up? That’s the question I will asking come August 1.
Holy shit! That doesn’t look like Ari at all. The silicon valley makeover is complete.
Well if there’s any question where Arrington’s bias lies, check him out writing a story on some other possible Microsoft acquisition rather than the Yahoo developments today. Even he’s given up the ghost, but not without that “talks are on again!” tease yesterday. Probably just testing his pageview power.
MSFT will buy YHOO for $25/share.
@7 Victor Samanovsky
$27, icahn needs to make his modest profit.
I think Yahoo can really make it and has all the technology it needs to do so currently at hand. It will need new leadership of course since they lost so many people, but by creating a new vision and laying out the steps to make it happen is more important than what was lost.
My personal hope, since I am into desktop customization (skinning for short) is that they somehow make real use of Konfabulator currently known as Yahoo Widgets. If they do that, they can really create some tools for commercial use, educational use and personal use and all of it can intergrate with their vast internet properties.
Heck, I’m still waiting for the, to come up with a widget tool that allows you to blog, add events, search and save articles for future reference. Oh well… maybe if someone else can do that, then maybe desktop widgets and gadgets will become popular and way more useful.
ari actually seems like a decent guy with a brain. go easy on him. in about twelve months he’ll realize he jumped on the ship of fools and look for an exit.
but you know this guy is pissed over the MSFT deal, it would have likely triggered a clause in his contract which would have opened his golden parachute after having worked…like three months? doh! now he has to try to slog it out with stock options on their way to the teens.
Technically part of their platform is already open source.., dont forget that they pretty run much the Hadoop project and they moved their crawl/index and internal analytics and log processing over to that infrastructure earlier this year.
Between that and The YUI libraries which are probably the most widely user interface tools for the web development they are already off to a good start of open sourcing parts of their platform.
Y! will continue to surprise the world…
Yahoo in my opinion is *the* company which has the technology and culture that is appealing to most web developers. If they release a PHP framework and cloud computing api, they can win over a considerable developer user base. It’s a company you can trust and I like their decisions so far. Solid leadership and growth ahead.
Yahoo needs a new CEO.
2 things they need to fix there personals. alought out of 10 is 8.
Classifieds. They should really focus on what makes money in advertising and bring users to the website.
kijiji.ca look at what ebay has done with free local classifieds.
Im not saying make a craigslist, but why not buy a classifieds website like a usedtoronto.com or http://www.shopandsave.com
These will help the site get traffic and bring a higher net worth.
Not sure why they bought flicker when they can buy free local classifess
@9 and @12… I agree!!
There are so many free classifieds like http://www.craigslist.org, http://www.khrido.com, http://www.kijiji.ca and also http://www.kijiji.com etc. Its hard to compete with all others even if they buy some of them.