• by Gavin O'Malley  @mp_gavin, December 8, 2006

Yahoo this week announced a major restructuring, including the creation of a new advertiser-and-publisher group to be overseen by CFO Sue Decker--but the changes might not satisfy Madison Avenue.

The new advertiser/publisher group will be made up of what had been Yahoo's disparate sales units--including the search marketing unit headed by David Karnstedt, the publishing unit headed by Josh Seigel, and the media sales and graphical ad team, headed by Wenda Millard Harris. All three will report to Greg Coleman, who will now report to Decker.

But some media executives contacted by OnlineMediaDaily said that they'd like to see more profound changes. They said Yahoo needs to better integrate search and display advertising, and also present marketers with more innovative ad opportunities.

Jeff Marshall, senior vice president and managing director of Starcom IP, said Yahoo has been too slow this year to monetize burgeoning areas such as social networking and consumer-generated media. "The bureaucracy they have set up has a tendency to focus more on filling the boxes than on creating ad opportunities around new areas like social networking and video," he said.

In contrast to sites like MySpace, Yahoo has only recently started creating branded areas for advertisers on its social networking properties. Yahoo just last month began rolling out its brand universe sites, with the launch of a site for Nintendo's Wii gaming system. According to Vince Broady, head of entertainment, games and youth, Yahoo plans to unveil another six to a dozen entertainment brand sites during the first half of 2007 before launching the balance by the end of next year.

Another senior media buyer, who wished not to be named, criticized Yahoo for failing to integrate its search and display sales teams. "Their organization is set up in such a way that we could spend 50 million dollars in search, and not be recognized at all by the display people."

Yahoo rival MSN began integrating the search and display ad sales teams last October, with the beta rollout of its new paid search platform, adCenter, according to Joe Doran, senior director, MSN.

Yahoo's director of public relations, Gaude Lydia Paez, responded that while Yahoo plans to maintain separate sales teams for search and display, the company has spent over a year aligning the two under Greg Coleman, Yahoo's executive vice president of global ad sales.

"There are in fact two sales teams who report up to Greg Coleman to make sure they're very involved with each other," said Paez. "The customer comes first; if they're interested in a combined strategy, we'll cater to that."

This week's overhaul came in the wake of a slowdown in ad sales. Yahoo in September warned that ad growth was slowing in the financial and auto sectors, sparking a Wall Street sell-off. So far this year, Yahoo's stock is down more than 30%.

Regardless of the reorganization, the much-anticipated Panama ad platform, scheduled to fully roll out next quarter, might help the company regain ad momentum. Earlier this week, Yahoo's CEO Terry Semel said the company plans to drive growth and profitability by creating "a full-fledged advertising network, with a marketplace that meets supply and demand both on Yahoo's valuable owned-and-operated network and across the entire Internet."

On Thursday, Paez said Panama's release is on track, despite this week's management shuffling. Earlier this week, Bear Stearns analyst Robert Peck wrote that advertisers attending a search engine conference this week said Panama is performing well. "Several comparisons were made to Google AdWords, and MSN adCenter, and Panama appeared to compare favorably with both online ad platforms," Peck wrote. "Ease of use, a robust interface to target ads by state and locality, and removal of several legacy quirks were cited as positive improvements."