On paper, the reorganization looks like it could help simplify and streamline key processes in order to help Yahoo achieve its key goals, said industry analyst Greg Sterling of Sterling Market Intelligence. However, it's hard to predict whether the plan will have its intended effects, because there are a lot of internal elements and dynamics that drive reorganizations but remain shrouded to outsiders, Sterling said.

"Reorganizations are very hard to second-guess because you don't necessarily know the people who are getting promoted or shifted around, and you don't see a lot of the internal considerations driving the decisions," Sterling said. "There's a lot of opacity there."

Based on their track records, the people being put in charge as part of the reorganization seem capable and respected, and it will be key for them to inspire confidence in the employees and generate enthusiasm among them, Sterling said. "You can reorganize and reorganize, but if you don't have strong leaders and engaged employees, then you won't get the desired results," he said.

For Weiner, the most interesting piece of the reorganization is the creation of a centralized product development group. One of Yahoo's main weaknesses in recent years has been its inability to create and release truly innovative products and services, having instead to rely on acquisitions to fill that internal gap, he said.

"They haven't had a great, formal process for innovating and getting products out," Weiner said. "Now that they have this (centralized) product group, they better start releasing some pretty damn good products, like the next Twitter or YouTube, products that will get people to say 'Yahoo is back.'"

This problem has been evident in the apparent disconnect between Brickhouse -- Yahoo's internal innovation incubator unit -- and the commercial product development teams, he said. Brickhouse has come out with some interesting, early-stage prototypes that have gotten the thumbs-up from industry experts but that, for some reason, have gotten stuck on the way to a mass release, Weiner said. "There's been no process to link Brickhouse into a product development and release cycle," he said.

The reorganization also calls for Prabhakar Raghavan to direct search strategy and Tuoc Luong to act as interim chief of the search product team. David Ku will be in charge of the Advertising Technology Group for search.

The reorganization will not touch Yahoo's Marketing Products Division, Connected Life and Corporate Marketing groups.

This reorganization is the latest of several major ones that the company has implemented in the past 18 months or so, and comes at a thorny time, as Yahoo deals with the aftermath of the failed attempt by Microsoft to acquire it.

[ For the complete saga of Microsoft's bid to take over Yahoo, check out InfoWorld's special report ]

The three-month pursuit, which ended in early May, has led shareholders to sue the company, saying its directors and managers failed in their fiduciary duty to shareholders by, allegedly, sabotaging Microsoft's acquisition attempt. Investor Carl Icahn has nominated an alternate slate of candidates to oust Yahoo's current board. In addition, Yahoo has seen many high-profile executives abandon the company in the past two months.