Memo from Yahoo VP: Shape Up, Now

The Wall Street Journal today posts an internal memo written by Yahoo senior vice president Brad Garlinghouse. In it he calls for a drastic reorganization and refocusing of the sprawling Internet giant.

We have the opportunity – in fact the invitation – to send a strong, clear and powerful message to our shareholders and Wall Street, to our advertisers and our partners, to our employees (both current and future), and to our users. They are all begging for a signal that we recognize and understand our problems, and that we are charting a course for fundamental change, Our current course and speed simply will not get us there. Short-term band-aids will not get us there.

An article by Kevin Delaney on the topic is behind a pay wall, but the WSJ is giving open access to the full text of Garlinghouse’s memo, which centers on the metaphor of spreading peanut butter too thin.

Garlinghouse is refreshingly blunt in his assessments and suggestions. For example:

  • “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 need to exit (sell?) non core businesses and eliminate duplicative projects and businesses.”
  • “We must reduce our headcount by 15-20%.”

Yahoo has already restructured somewhat in response to the memo, which was written last month, giving Garlinghouse charge of the new “communities, communication, and front doors” division. Just yesterday he was quoted spreading the gospel in articles about Yahoo’s acquisition of contest site Bix.

“The way they’ve built this, we can integrate this across the entire Yahoo network,” he said to Red Herring. “This is an example of how Yahoo was very nimble about executing this.” Meanwhile, he told ClickZ, “We definitely see this as a platform. It’s not just about a great destination experience, but also about how it can be omnipresent across everything Yahoo does.”

But actions speak louder than words. Garlinghouse laments in his manifesto that Yahoo has too many competing products, both internally and as a result of acquisitions. Didn’t Yahoo introduce a new contest site, Yahoo Talent Show, less than a month ago? And now the company buys Bix. It’s going to take more than leaking a memo to turn things around.