Yahoo! Inc.'s (NASDAQ: YHOO) latest reorganization plan that consolidates the company in three divisions has so far failed to wow investors. The reorganization aims to centralize product development and deliver a more efficient global decision-making process.
Jefferies & Co. Inc. analyst Youssef Squali weighs in on the plan today, writing in a research note that its success "is far from certain," especially given that it's likely to result in more departures of high-level Yahoo! execs. But Squalli does see potential benefits from the plan, noting that it will simplify global communication and processes, improve agility in terms of global product launches and cut through redundancies and inefficiencies. Still, Squali says Yahoo! can only restore investor confidence through a "rubber meets the road" execution.
The analyst also addresses Yahoo!'s looming proxy fight with Carl Icahn and the on again-off again negotiations with Microsoft Corp. (NASDAQ: MSFT). Though Icahn has yet to formulate a strategy for how he would run Yahoo! differently if his slate of candidates is elected, Squali believes if the dissident investor were to win a handful of board seats, though not full control, it could bring a "much needed sense of urgency" to Yahoo!, something he says the current board has lacked for more than two years.
