SAN FRANCISCO — Yahoo finally gave employees a hint of its strategy last week.
In a memo, Scott Thompson, the company's new chief executive, told Yahoo's remaining 12,000 employees that he was revamping the company into three divisions: consumer products, geographic regions and technology. The goal is to refocus the flagging Internet business on two potential areas for growth: Yahoo's media properties and the wealth of data it has on its users.
With 700 million visitors, Yahoo maintains one of the largest portals on the Web, but it has failed to translate its audience into revenue. Revenue has declined over the past three years, and Yahoo continues to cede its share of the advertising market to its competitors, notably Facebook and Google. Yahoo's board has dismissed five chief executives in five years, and the company continues to frustrate shareholders with its reliance on cost-cutting rather than growth.
"Our highest priority is winning in our core business and that will earn us the right to pursue new growth opportunities," Thompson wrote in the memo. "To accomplish that, we're establishing a new leadership structure, organizing all of our activities around Yahoo's customers."
The announcement was made one week after the largest layoffs in Yahoo's 17-year history. The company dismissed 2,000 employees, or 14 percent of its workforce. Blake Irving, the company's chief product officer, resigned.
The leaders of the new technology group will find ways to leverage Yahoo's trove of data, which appears to be a cornerstone of Thompson's strategy since joining Yahoo from PayPal in January.
"The data is very, very impressive," Thompson said in a January conference call. "You'll see some interesting, data-oriented experiences coming out sooner versus later."
Thompson has yet to elaborate on how Yahoo plans to use that data. People inside the company, who declined to be named, said it was still unclear how, or even whether, the company could translate that data into revenues.
The products group will be dispersed across divisions. Yahoo's new consumer division will include its media properties.
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