Yahoo Planning for Makeover?

Yahoo's Senior Vice President Brad Garlinghouse caused a bit of a stir recently when he posted an internal memo calling for dramatic company change.

The memo, entitled "The Peanut Butter Manifesto," outlined the company's numerous problems.

When discussing Yahoo's lack of focus, Garlinghouse chose a very appropriate analogy: "I've heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular. I hate peanut butter. We all should." (Source: slashdot.org)

Besides spreading the company too thin, Garlinghouse also stated that a restructuring is necessary to eliminate the redundancies in the company. He cited several examples, including Yahoo! Music Engine and Musicmatch, which illustrate the company's heap of repetitive projects.

"We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company," he notes. (Source: wsj.com)

Yahoo currently maintains a workforce of nearly 10,000 employees -- but this figure will soon change. Garlinghouse expects to cut Yahoo's workforce by 15 to 20 percent as part of the restructuring. (Source: reuters.com)

This year has not been kind to Yahoo, which has seen a 31.5% decrease in its share values since January. (Source: reuters.com)

However, Garlinghouse remains confident that Yahoo will be able to make the turn around. He is quick to remind his employees of the company's strengths: "We have the largest audience, [and] they are highly engaged and our brand is synonymous with the Internet. If we get back up, embrace dramatic change, we will win." (Source: wsj.com)

Keeping up with rapidly expanding Google will not be an easy task for the lagging company. That being said, Garlinghouse seems to have pinpointed Yahoo's sore spots and outlined a solid plan. Flipping the company on its head and shaking out the garbage may be just what Yahoo needs.