Yahoo execs leaving ahead of major reorganization

UPDATE JUNE 20: For more details see the full story on Yahoo's brain drain.

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Two more Yahoo executives and probably a third are jumping ship as the struggling Internet company prepares another radical overhaul to be announced as early as next week.

Qi Lu, at right, and Vish Makhijani, each responsible for crucial areas of Yahoo’s business, are leaving the Sunnyvale, Calif., company, according to reports on TechCrunch and Boomtown. One person familiar with the situation confirmed the departures for us.

At least two more top executives affected by a planned reorganization of the company also are contemplating quitting, said the person, who spoke on condition of anonymity. The executives are Scott Moore, leader of the company's Santa Monica-based media group, and Tapan Bhat, an executive who oversees some of Yahoo's home page and network services efforts.

A Yahoo spokeswoman declined to comment.

The mass exodus comes before Yahoo reorganizes into one product group and into regions, with Hillary Schneider, executive vice president for global partner solutions, heading up North America, the person said.

Yahoo President Susan Decker has groomed Schneider, who joined Yahoo in 2006, to move up the corporate ranks. The sweeping shake-up, as Yahoo faces a battle for control from corporate activist Carl Icahn, directly led to the executive departures, the person said.

Lu, who as executive vice president of the search and advertising technology group oversaw engineering efforts for the company’s search engine and search advertising technology, is moving to China. Makhijani is leaving to head up the Bay Area operations of Russia’s leading search engine, Yandex.

Brad Garlinghouse, who as senior vice president for communications and communities is responsible for Yahoo Mail and other key products, is considering his alternatives, including posts with venture capital and private equity firms. He is the author of the now famous "Peanut Butter Manifesto."

The three join a growing list of senior managers who have headed out the door or are considering doing so since ...

... talks with Microsoft ended and Yahoo signed a search advertising deal with rival Google.

Jeff Weiner, executive vice president of Yahoo's network division, is leaving to split his time between two venture capital firms. Usama Fayyad, executive vice president and chief data officer, is also leaving. Longtime employee and evangelist Jeremy Zawodny announced today that he was taking a job at Craigslist. Flickr founders Caterina Fake and Stewart Butterfield, who sold the photo-sharing site to Yahoo in 2005, recently announced their departures. And the list goes on.

"No one is sitting there thinking, 'I want to stay.' The quantity and quality of people leaving is overwhelming," a former Yahoo said.

Just a few weeks ago it was hard to imagine what could be worse than key investors' precipitous loss of confidence in Yahoo's management. Now founder and Chief Executive Jerry Yang and Decker seem to have lost something even more valuable: the confidence of employees.

Former Yahoos, fiercely loyal to their old company and to Yang, are watching the stunningly rapid implosion with shock and sorrow.

Microsoft CEO Steve Ballmer may have triggered this mess, but now former Yahoos say company management is making things worse. "Unfortunately, these wounds seem self-inflicted," the former Yahoo said.

Microsoft should take its proposal to buy Yahoo's search business to the Internet company's shareholders, investor Mithras Capital said today in a letter to Microsoft. The firm holds 1.7 million Yahoo shares.

The software giant no longer seems to be in a hurry and is more likely to wait on the sidelines for the dust to clear.

-- Jessica Guynn

Photo of Qi Lu courtesy of Yahoo