Yahoo finally gave employees a hint of its future strategy Tuesday.
In a memo obtained by The New York Times, Scott Thompson, the company's new chief executive, told Yahoo's remaining 12,000 employees that he was restructuring the company around three core groups: "consumer, regions and technology."
The consumer business will include media properties, commerce businesses like Yahoo Travel and Yahoo Autos, and social media properties like Flickr. Ross Levinsohn, who previously ran Yahoo Americas, will take over Yahoo's media business. Shashi Seth, who currently runs Yahoo's search business, will run Yahoo's social media properties, e-mail business and Flickr.
The company said it was not ready to name the head of its commerce division but a source inside Yahoo, who declined to be named because he was not authorized to speak publicly, said that the position would be filled by Sam Shraugher, who worked under Mr. Thompson at PayPal and resigned as PayPal's head of products last week.
Rich Riley, who previously oversaw the company's operations in Europe, the Middle East and Africa, will take over for Mr. Levinsohn as the head of the company's Americas division. He will also be in charge of deploying more engineers to Yahoo's offices globally.
And Yahoo's technology group will be run by Mark Morrissey, who previously ran the company's search business. Mr. Morrissey will oversee Yahoo's research and development arm, Yahoo Labs, and together with David Dibble, who currently runs the company's data centers, will be in charge of finding ways to leverage Yahoo's trove of data on its 700 million visitors.
The goal, Mr. Thompson told employees in the memo, is to "bring some of our best product designers and engineers much, much closer to consumer needs and demands."
The announcement was timed just one week after Yahoo said it would lay off 2,000 employees, or 14 percent of its work force, and Blake Irving, the company's chief product officer, resigned. Mr. Thompson said in a memo to employees last week that he waited to outline Yahoo's future until after the layoffs because "we felt it was only fair and respectful to those who are leaving and transitioning to take care of each of them before turning to our future."
Yahoo employees and investors have been waiting for the company's management to address its decade-long identity crisis, during which five chief executives were dismissed in five years. Mr. Thompson, who joined the company from eBay's PayPal unit last January, has spent the greater part of the last three months studying the company's growth prospects, conferring with outside consultants from the Boston Consulting Group and fending off angry shareholders.
With 700 million visitors, Yahoo still maintains one of the largest audiences on the Web, but has been unable to increase revenue. The company continues to cede advertising market share to competitors, notably Facebook and Google, and has frustrated shareholders with its reliance on cost-cutting rather than new areas for innovation and growth.
Based on the restructuring, it appears Mr. Thompson plans to hedge much of Yahoo's future on the media and content properties it hopes will tether visitors to its site and lure back advertisers, as well as on the data it has on its users.
Mr. Thompson has yet to elaborate on how Yahoo plans to use that data. Sources inside the company, who declined to be named because they were not authorized to speak, said that it was still unclear how, or even whether, the company could leverage the information to its advantage.
It was also too early to tell whether the restructuring would be enough to satisfy Yahoo shareholders. The company faces a proxy battle with Daniel Loeb of Third Point, a hedge fund with a 5.8 percent stake in Yahoo.
The company is also engaged in a patent war with Facebook. Yahoo sued Facebook for alleged patent infringement last month, which prompted Facebook to file a countersuit last week. Facebook's suit claims Yahoo violated patents responsible for some 80 percent of its revenue last year, or more than $4 billion.
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