All Things Digital

Oh, this is just too good to pass up, so it is once again time for BoomTown to let you know exactly what Yahoo CEO Jerry Yang actually meant in his internal memo to employees about the hiring of Bain & Co. to evaluate its troubled business systems.

Jerry wrote: yahoos,

it’s time for another update.

Translation: Yep! Still no adult punctuation! We might continue to face serious big-boy issues at the company, but we refuse to give in on our insistence on kindergarten spelling patterns.

In that vein, would you like a nice cold glass of chocolate milk before I get to the bad news?

Jerry wrote: as a company, we’ve made some great progress this year. while it hasn’t been easy, especially in light of the challenges we’ve faced (not to mention the current downturn in the macro economic environment), we’ve accomplished a tremendous amount and we’re all working hard to continue executing on the company’s strategic plan.

Translation: As a company, we have managed to avoid disaster more times that Serena and Dan have broken up and reunited on one episode of “Gossip Girl.”

We’re foiled Steve Ballmer of Microsoft (MSFT)! We’ve co-opted shareholder activist Carl Icahn! We’ve pissed off investors like Gordon Crawford!

Much like Serena and Dan, who are arguably a lot sexier to watch in their state of complete plot paralysis, that all this has moved Yahoo (YHOO) precisely zero feet forward in terms of true changes at the company does not matter.

Jerry wrote: as we look ahead and to position us for success in 2009, we’re continuing the work already underway to get fit as an organization: actively looking for ways to make process and structural changes to our business that will allow us to work more efficiently, with more scale. we’ve enlisted the help of Bain & Co. to work with the leadership team on identifying ways to leverage our strengths, and to improve and accelerate our performance. we all know and experience parts of yahoo! where we can do better and be more agile in a competitive marketplace. this is consistent with what you told us in the YEES survey conducted in may–we need to find easier ways to work within yahoo!, and more importantly, create an even better experience for our customers and users.

Translation: Here come the weasel management consultants!

By saying “actively looking for ways to make process and structural changes to our business that will allow us to work more efficiently,” we actually mean layoffs.

By “identifying ways to leverage our strengths, and to improve and accelerate our performance,” we actually mean learning how to make layoffs.

By “we need to find easier ways to work within yahoo!,” we actually mean having the weasels, oops, Bain, tell us the best way to get rid of people via … layoffs!

Jerry wrote: each one of us will play an important role in this process. in the coming weeks, we’ll be soliciting your input and feedback. i want to know how we can improve the way we work with each other, and the way others work with yahoo!.

Translation: While the famous “Peanut Butter Manifesto” by Brad Garlinghouse (who laid himself off!) outlined all this and more years and years ago, we’d like you to tell us the best way to fix what’s broken, even though that has been, well, the presumable job of management.

Also, if you have any thoughts on who we should lay off, please do not hesitate to put your suggestions in the purple boxes we have placed strategically throughout the campus (and stuffing ballots with my name on them will not count!).

Jerry wrote: i know that yahoo! can benefit greatly from more discipline among all departments and functions, across the company. longer term, getting fit now will enable us to be more successful moving forward.

Translation: Discipline = layoffs. Getting fit = layoffs. But just think how lean and trim we’ll look when it is all over!

Jerry wrote: thanks,

jerry

Translation: Thanks and please don’t forget to take your complimentary purple Yahoo cozy on the way out! (The Bain people said it would be a nice touch.)

And, as an added plus, here is a decoding of the fully-punctuated statement Yahoo PR guy Brad Williams made about rumors of possible layoffs at the company:

Brad wrote: Yahoo! has been exploring ways to streamline our processes and bring new agility and efficiency to how we work as an organization. As part of this effort, we have engaged Bain & Co. to help us identify opportunities for improvement. This work is well underway, with the ultimate goal of positioning Yahoo! to achieve long-term, sustainable growth.

Translation: After I am laid off, I think we can all agree that this kind of stunning verbal acrobatics is sure to impress the folks over at Dunder Mifflin, where I hope to work next.

Now that he’s officially–well, Yahoo has not said so, but it is so–leaving the company later this summer, what say we blame Brad Garlinghouse for all the woes of Yahoo!

After all, Garlinghouse’s infamous “Peanut Butter Manifesto” was the key ur-moment that one could point to as the one in which the curtains were pulled back at the troubled Internet company to reveal, well, a very sticky mess.

Garlinghouse (pictured here), who ran communications and communities for Yahoo (YHOO), is set to be replaced in part by Scott Dietzen, who was the president and CTO of Zimbra (and before that CTO of BEA Systems). Yahoo bought the highly innovative open-source email startup last fall for $350 million.

(By the way, Dietzen will get only 50%–communications products and services–of Garlinghouse’s job, while Front Door head Tapan Bhat will get communities.)

But back to Brad and peanut butter: The 2006 internal document, penned by the Yahoo senior vice president, essentially unfairly impugned delicious peanut butter by using it as a metaphor for Yahoo spreading its resources too thinly.

As far as I am concerned, life is all in the spreading–you can go thick with peanut butter, Brad!

In any case, as a memorial to the Garlinghouse era, BoomTown decodes the manifesto:

Brad wrote: Three and half years ago, I enthusiastically joined Yahoo! The magnitude of the opportunity was only matched by the magnitude of the assets. And an amazing team has been responsible for rebuilding Yahoo!

I proudly bleed purple and yellow everyday! And like so many people here, I love this company.

Translation: This is the borderline cultish kissing-up part, before I deliver the coup de nut.

Thus: Blah, blah, blah–love it! Blah, blah, double blah–so profound I think I shall weep!

And the nuclear blah, blah, blah–I pull out the bleeding purple and yellow expression, used way too often at Yahoo, which, when you really think about it, is just gross.

Brad wrote: But all is not well. Last Thursday’s NY Times article was a blessing in the disguise of a painful public flogging. While it lacked accurate details, its conclusions rang true, and thus was a much needed wake-up call. But also a call to action. A clear statement with which I, and far too many Yahoos, agreed. And thankfully a reminder. A reminder that the measure of any person is not in how many times he or she falls down–but rather the spirit and resolve used to get back up. The same is now true of our Company.

It’s time for us to get back up.

Translation: Cue ominous music! Drag out the “Rocky I-VI” cliches (except for V, which sucked)! Order those I’ve-Fallen- and-I-Can’t- Get-Up thingies for the entire company. Also, insult the media, even though that’s exactly where all Yahoo employees get the most up-to-date information about what’s what here.

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As BoomTown reported last night, the Yahoo (YHOO) reorg will be unveiled later this morning, with the slate of execs that this column outlined last week in its gory–oops, I mean, glorious–detail.

Sources said a more substantial public announcement has been pushed by Yahoo’s board–apparently, an internal email to employees was considered too–to show Yahoo’s new team and that the company still has a strong bench, despite a lot of exec departures of late.

As we already wrote, the structure will pivot on several key execs, reporting to President Sue Decker.

EVP of Yahoo’s Platforms and Infrastructure division Ash Patel as head of a new Audience Products group (its name was changed from Global Products); Global Partner Solutions EVP Hilary Schneider as the head of a new U.S unit; various folks running around the rest of the globe.

There will also be another strategy team group with a new head, who has not yet been chosen.

And Yahoo will name Scott Dietzen (pictured, right) to take over part of the job of SVP Brad Garlinghouse, who running was running all communications properties and products. Dietzen will get the communications portfolio, which includes email and messaging, all under Patel.

(Community properties like Flickr will actually move under Front Door Head Tapan Bhat, who also reports to Patel.)

Dietzen was the president and CTO of Zimbra (and before that CTO of BEA Systems), the highly innovative open-source email startup Yahoo bought last fall for $350 million.

Garlinghouse (pictured, left), as we reported last night, will not be officially leaving until the end of the summer, though. He is currently traveling in Asia, sources said, and has not yet decided on a new gig.

He is, of course, the man who wrote the infamous “Peanut Butter Manifesto,” which first revealed deep tension within Yahoo.

Yahoo is likely to also announce changes in the engineering organization under CTO Ari Balogh, who is also orchestrating some massive and much-needed changes in the arena at Yahoo.

As expected, Yahoo will announce its reorg tomorrow morning, along the same lines as BoomTown outlined in detail last week.

The only issue that arose was over the appointment of Ash Patel to head the new Global Products group. His appointment was greeted with internal dissent, but Yahoo CEO Jerry Yang was said to have insisted that Patel remain on as planned.

Last week, I outlined the sweeping internal changes at Yahoo (YHOO), which will again dramatically change the structure of management.

As we wrote, the new Global Products group will be headed by Patel (pictured here), who is currently EVP of Yahoo’s Platforms and Infrastructure division.

Much of the Network division, which until recently was under the leadership of the now departed Jeff Weiner, will move under Patel, including search, mail, instant messenger, front page, platforms and social networking.

All these products are considered “global” properties and products, including divisions run by communications and communities SVP Brad Garlinghouse, former Search SVP Vish Makhijani and Front Door head Tapan Bhat.

While Makhijnai is leaving, Bhat is staying so far and Garlinghouse–despite previous reports of his imminent departure–will likely stay on through the summer.

Sources said the prospect of working for Patel is not a welcome one for some Yahoo execs in the old Network division.

Patel has been at Yahoo since 1996, and some do not think his operational style is dynamic enough and claim his division has had problems shipping products.

In the new organization, Global Partner Solutions EVP Hilary Schneider (pictured here) will get purview over the entire U.S. region.

Schneider will continue to oversee all ad sales and add on the Yahoo Media Group under Scott Moore, who was Weiner’s other direct report.

That shift will bring together Yahoo’s vast content properties, like Yahoo Finance, with ad sales and align them more closely.

The rest of the world will be split up between three other regions: Europe, headed by Toby Coppel; Asia, run by Rose Tsou; and emerging markets, headed by Keith Nilsson.

Patel, Schneider and the others all report to Yahoo President Sue Decker.

The reorg was largely run by Decker (pictured here) and top HR execs. Yang was involved but not very visible in the process to top managers.

And all of this reorg might be moot anyway.

Billionaire activist investor Carl Icahn is still pursuing his proxy fight to remove Yahoo’s board and management, which could come to a head at Yahoo’s annual meeting on Aug. 1.

And investors are pressing Microsoft (MSFT) to make another proposal to run Yahoo’s search ad and search businesses, which could include the software giant buying a significant stake in Yahoo.

While some think Yang will soon hand over the CEO reins to Decker, increasing numbers of insiders and outside investors are pushing for new management at the top, as Yahoo’s shares decline and more and more talent takes flight from the company.

“A fish stinks from the head,” joked one employee. “This reorg is change, but what we might need goes higher than this.”

Oh, Scott! Oh, Tapan! Want an extra office? Perhaps a giant sword?

Of the four powerful direct reports to former Yahoo Network division head Jeff Weiner–Front Door and Network Services’ Tapan Bhat, Brad Garlinghouse, who heads Yahoo’s communications and communities arenas, Media Group head Scott Moore and Yahoo Search’s Vish Makhijani–it seems only two are sticking around for now in the current state of extreme flux at Yahoo (YHOO).

That would be Moore and Bhat, who are being quiet–too quiet–as the new reorg, which we reported on in detail here, chugs into place next week.

It feels like an endless loop of “The Highlander” movie over at Yahoo these days!

The group seemingly collapsed after Weiner’s departure last week in a heap of increasingly messy goodbyes.

Makhijani is out, although it is not entirely clear that Garlinghouse is as yet.

Several sources now tell me he is considering staying around through the summer, rather than leaving in a week.

That is, unless a great opportunity opens up for the man who penned the infamous “Peanut Butter Manifesto,” which started Yahoo off on this journey of painful self-discovery.

Thanks, Brad!

Which leaves us with the fate of Bhat and Moore.

As I wrote, current plans are to fold the highly likable Bhat (pictured here) and his group into a new one called Global Products, which will be run by Ash Patel, currently EVP of Yahoo’s Platforms and Infrastructure division.

Bhat’s properties, like MyYahoo, are considered “global” and will be managed out of Yahoo HQ in Sunnyvale, Calif.

But will he stay?

While Bhat is reportedly unsure about the new structure and is considering his options, most expect him to do so, as there could be considerable upside for him even with Yahoo’s current turmoil.

So too for Moore (pictured here), who runs the Yahoo Media Group, which will be moved under Hilary Schneider, who is currently the Global Partner Solutions EVP.

The new org will bring together Yahoo’s vast content properties, like Yahoo Finance, with ad sales and align them more closely.

Several sources said Moore, a former Microsoft (MSFT) exec, is satisfied about the new arrangement and the prospect of reporting to Schneider.

And if Microsoft does return and try another takeover, he would also likely be set.

But other sources said he also has been scouting out a new start-up venture that could include some significant investors.

Indeed, execs like Moore and Bhat have a truckload of options, in any case.

Why? Because Yahoo’s President Sue Decker, who is helming the reorg, cannot afford to lose more top execs, placing the pair in the catbird seat.

And, with a lot of Web 2.0 companies in need of some experienced execs, familiar with big Internet companies, the sky might be the limit there too.

Company in crisis? Employees morale plummeting? Shareholders in revolt? Stock slumping? Barbarians at the gate?

The perfect time to get out the Rubik’s Cube for yet another Yahoo reorganization!

BoomTown now has the outline of the likely sweeping management changes at Yahoo (YHOO), which we reported on earlier this week here and also here, to be announced next week by the troubled Internet company.

The reorg, which will drastically change the structure of management, explains a lot about the spate of recent departures by top execs at the company.

Let’s just dive in, shall we?

First off, a spanking new Global Products group, which will be headed by Ash Patel (pictured here), who is currently EVP of Yahoo’s Platforms and Infrastructure division.

Much of the Network division, which until recently was under the leadership of the now departed Jeff Weiner, will move under Patel, including search, mail, instant messenger, front page, platforms and social networking.

All these products are considered “global” properties and products and will be managed out of Yahoo HQ in Sunnyvale, Calif.

That means the fiefdoms of communications and communities SVP Brad Garlinghouse, Search SVP Vish Makhijani and Front Door head Tapan Bhat will move into Global Products.

Which would explain why Makhijani is now headed out the door and Garlinghouse is on the fence about his own departure.

Bhat is also reportedly unsure about the new structure and is considering his options.

Unlike Qi Lu, Yahoo’s EVP of Search and Advertising Technology, who is also leaving and is considered a tech rock star at Yahoo, the prospect of working for Patel is not a welcome one for some Yahoo execs in the old Network division.

Patel has been at Yahoo since 1996, which makes him one of the oldest of old guards at the company.

“No one wants to report up through him,” said one Yahoo exec. “He’s a Yahoo lifer and not the kind of dynamic leader we need.”

More welcome–although not by all–is likely to be the move to give Global Partner Solutions EVP Hilary Schneider (pictured here) purview over the entire U.S. region.

She will be Patel’s peer in the new organization and both will report directly to Yahoo President Sue Decker.

Schneider’s arena will include all of ad sales and also the Yahoo Media Group under Scott Moore, who was Weiner’s other direct report.

That shift will bring together Yahoo’s vast content properties, like Yahoo Finance, with ad sales and align them more closely.

In addition, some other consumer-facing products will move to Moore under Schneider.

In the last reorganization, Moore got autos and real estate, as well as all entertainment and sports.

Several sources said Moore, a former Microsoft (MSFT) exec, is satisfied about the new arrangement and the prospect of reporting to Schneider.

But other sources said he also has been scouting out a new start-up venture that could include some significant investors.

In addition, some execs are worried about the likable Schneider’s ability to handle such a large job.

“There is lot on her plate and, while she is good at the business side, she is not a products person,” said one in a common refrain about her.

The rest of the world will be split up between three other regions: Europe, headed by Toby Coppel; Asia, run by Rose Tsou; and emerging markets, headed by Keith Nilsson.

Yahoo’s relatively new CTO Ari Balogh will take over a lot of Lu’s team with various engineering execs under him.

Top managers, most of whom had little input in the reorg, which was run by Decker (pictured here) and top HR execs, are reeling from the changes being presented with what most say is little consultation.

“I am not sure right now, with all this drama and all this tension from Microsoft’s failed takeover and the rest of it, why we have to do this,” said another exec. “This feels crazy.”

Maybe not so much. Yahoo shareholders are becoming restless after Microsoft dropped its $33 a share bid for Yahoo and want some action soon.

And billionaire activist investor Carl Icahn is still pursuing his proxy fight to remove Yahoo’s board and management.

Insiders within Yahoo suspect that top execs want to make changes before the Aug. 1 annual meeting, so they can show momentum.

The question is whether that will include another more significant change–the stepping up to Chairman for Yahoo CEO Jerry Yang and the handing over the CEO reins to Decker.

Many execs said that Yang has been strangely absent from the communications around the reorg, which has been driven largely by Decker.

“Where’s Jerry here? He is like a ghost,” said another exec. “It is nerve-wracking.”

Oh, BoomTown had to say it, didn’t I?

But, as SVP Brad Garlinghouse’s fate is still uncertain at Yahoo (YHOO), his edge-of-your-seat situation is the latest wrenching dramatic shift at a company that can’t seem to stop producing them.

While reports say he has quit, Garlinghouse actually has not done that yet and will not likely make a definitive move to leave for at least a week or longer, unlike fellow Yahoo SVPs Qi Lu and Vish Makhijani, who have tendered their resignations this week.

And, of course, their boss, Network division head Jeff Weiner, who left Yahoo last week.

Garlinghouse’s departure, given all the attention, could move forward quickly, as Weiner’s did, especially given all the tumult at Yahoo. He is Yahoo’s SVP in charge of communications and communities.

So why are he and others leaving?

Sources say Garlinghouse and the other execs are deeply unhappy about the new reorganization being architected largely by President Sue Decker.

Structured now to hand over a lot more power to Yahoo EVP Hilary Schneider, who runs the Global Partner Solutions division, the changes are being made without a lot of input from execs like Garlinghouse.

Instead, Decker–with Yahoo CEO Jerry Yang–is working with a small group of top managers, especially Chief Human Resources Officer David Windley, so a lot of other top managers are largely in the dark about the changes.

This is not a good thing for morale, given that the reorg is likely to take power from the various fiefdoms at Yahoo that execs like Garlinghouse have presided over.

That’s why, unless the balance of power is changed in the new plan, it is unlikely Garlinghouse will stay on, said several sources, much more than a week or two.

If it happens, his departure will be more than ironic.

After all, it was Garlinghouse who got this whole thing started–or at least unveiled Yahoo’s internal problems to the world–with his famous “Peanut Butter Manifesto” in November of 2006.

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As BoomTown reported earlier today, well-regarded top Yahoo techie Qi Lu (pictured here) will be leaving the company, in a move to be announced today or tomorrow by the troubled Internet company.

One Yahoo insider, who characterized Lu as a “rock star” and highly regarded at the company, said the departure was a “blow” that will be devastating to the engineering organization at Yahoo (YHOO).

Our post also alluded to the precarious situation around the top four execs just under Network division head Jeff Weiner, who left last week.

Those execs are: Front Door and Network Services’ Tapan Bhat, Brad Garlinghouse, who heads Yahoo’s communications and communities arenas, Media Group head Scott Moore and Yahoo Search’s Vish Makhijani.

It looks as though the departure of Makhijani (pictured here) will also be announced today or tomorrow.

With Yahoo search just treading water and a deal to outsource some of the search-ad business to Google (GOOG), one has to wonder how Makhijani endured in the center of the storm for this long.

And while there have been reports that Garlinghouse will also leave this week–it was he who started the ball rolling with his infamous “Peanut Butter Manifesto” that called for deep change at Yahoo nearly two years ago–sources tell me he is still sifting through his options, in light of a sweeping reorganization at Yahoo that he is reportedly deeply unhappy about.

That’s why it is more than likely that Garlinghouse (pictured here) will also leave–perhaps by next week–but he has not resigned or told his subordinates of any plans as yet.

But given that power is shifting dramatically to Global Partners Solutions EVP Hilary Schneider in the reorg I wrote about last night, Garlinghouse’s time at Yahoo seems limited.

As I wrote: “Many sources expect that Schneider is likely to amass more power in the new structure–she is close to [Yahoo President Sue] Decker, who must dramatically rejigger Yahoo’s top echelons to better focus the company on its stated objectives of becoming the premier ad network and a consumer ’starting point.’”

More like ending point for a lot of critical Yahoo execs, as repercussions from Yahoo’s botched handling of the Microsoft (MSFT) takeover bid ripple throughout the company.

Memo to Moore and Bhat: If this were a murder mystery, like “Ten Little Indians,” one of you better tread very, very carefully.

My special BoomTown Yahoo (YHOO) tip inbox is filling up fast this week from Yahoo employees–who, by the way, seem to like to use Gmail as their secret one–all buzzing about the next shoe to drop.

That clodhopper would be, of course, which major exec will leave the troubled Internet company, all due to a major reorg that is about the hit the company within the next weeks.

After the recent departure of Network division EVP Jeff Weiner and Chief Data Officer Usama Fayyad–along with the flashier exit of Flickr’s Co-Founders Stewart Butterfield and Caterina Fake (who, it should be said, have been easing quietly out the door for a while now)–several sources tell BoomTown that Search and Advertising Technology group EVP Qi Lu is the next on his way out.

Dr. Lu (pictured here), holder of 20 patents, leads development efforts around Yahoo’s Web search and monetization platforms.

But Yahoo CEO Jerry Yang and President Sue Decker should be worried about just about everyone at this point, from Connected Life EVP Marco Boerries to Platforms and Infrastructure division EVP Ash Patel to the quartet of execs under Weiner.

Any insecurity in that group—Front Door and Network Services’ Tapan Bhat, Brad Garlinghouse, who heads Yahoo’s communications and communities arenas, Media Group head Scott Moore and Yahoo Search’s Vish Makhijani–and other SVPs on that level really, are especially worrisome, as the voids above and below them become larger and offers from the outside more enticing.

So, combined with the levels of tension rising at the company dramatically with the continued external turmoil, the looming reorg has got to have them plenty worried.

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Jeff Weiner (pictured here), as BoomTown reported in a story broken by BoomTown Tuesday and also yesterday, will be leaving Yahoo (YHOO) to become an entrepreneur in residence at both Accel Partners and Greylock Partners.

But, despite a lot of speculation on the subject by sites like TechCrunch (whose curiously petulant lifting of actual reporting done by others–in this case, BoomTown–without any attribution is fast approaching pathetic), let’s try some more actual reporting:

Sources at the company said that Weiner will not likely be replaced as Network division head by one of his four direct reports.

Those execs are: Front Door and Network Services’ Tapan Bhat, Brad Garlinghouse, who heads Yahoo’s communications and communities arenas, Media Group head Scott Moore and Yahoo Search’s Vish Makhijani.

Instead, sources at the company think much of Weiner’s organization could be headed by Hilary Schneider (pictured here), who is EVP Global Partner Solutions, in order to better align Yahoo’s ad revenue-producing units with its products, software, search and services side.

Not having those responsible for selling ads in close sync with, for example, new content or software initiatives has produced a level of frustration with executive ranks at the company.

The setup would create more of a global product organization, with more integrated sales and product development.

“It would be nice to have sales in the room now, as we develop services, instead of totally separate,” said one exec at Yahoo.

Whatever the resulting organization, Weiner’s departure gives President Sue Decker the ability to more dramatically rejigger Yahoo’s top echelons to better focus the company on its stated objectives of becoming the premier ad network and a consumer “starting point.”

Schneider is a Decker favorite, having been brought to the company from Knight Ridder in the fall of 2006, making her a much later arrival to Yahoo than Weiner, who came in 2001.

She is very well-liked by Yahoo troops and is considered a strong leader at the company.

A move to give her more responsibility would also be accompanied by allowing Weiner’s reports to have more autonomy over their units.

It could also presage a move to make Decker the CEO eventually, with Schneider as her No. 2 and Yahoo CEO Jerry Yang as chairman.

Currently, the company is unlikely to make such a drastic change, especially since it is under siege in a proxy battle being waged by billionaire icon Carl Icahn.

Icahn has recently called for Yang’s ouster, in the wake of its failed takeover talks with Microsoft (MSFT), a fight that has tarnished both Yang and Decker on Wall Street and even within Yahoo ranks.

In any case, there is no timing on these moves as yet, as the company was caught unaware by Weiner’s plans, sources said, since he was on paternity leave.

Weiner had not indicated that he was considering leaving for good until recently, although many inside and outside the company had surmised that he would eventually leave after former CEO and Chairman Terry Semel did early in the year.

Weiner came to Yahoo with Semel and is a longtime protege of the former Hollywood exec.

Yahoo’s board has been meeting today and, doubtlessly, its directors had a lot to talk about (more on that later!).

Of course, there’s the obvious topic of having to figure out how best to deal with the noisy stylings of billionaire investor Carl Icahn, who is waging a proxy war on Yahoo (YHOO) and calling for new management at the top.

But perhaps what the board should be focused on is the old management at Yahoo, especially in the levels just below the top, who have been operating the company under a lot of stress for far too long.

These would be those not involved in the deal–which has been essentially restricted to the board and also to CEO Jerry Yang, President Sue Decker and CFO Blake Jorgensen.

Yahoo’s operating execs have only been brought in when they are asked to assess the impact of possible options.

So with the clear-cut deal to be acquired by Microsoft (MSFT) seemingly off the table for now and a range of squishier partial ones being considered with either Microsoft or Google (GOOG), along with the continuing distraction of Icahn’s three-ring circus, it has not been easy for its execs to keep focus.

Thus, many continue to consider their options.

The latest speculation, for example, surrounds the fate of Network division EVP Jeff Weiner (pictured here), who has been on paternity leave for four weeks and will return to work next Monday, sources said.

Sources also tell me there will be a major internal announcement tomorrow and many quickly speculated to me that it would concern Weiner’s fate.

Not quite yet. But most at Yahoo I have spoken to do not expect him to stay long, even leaving within the next few weeks, pointing to the continued uncertainty at the company and also, I would imagine, sheer weariness.

Weiner came to Yahoo with former CEO and Chairman Terry Semel in the 2001, the last period Yahoo was in major distress.

And BoomTown has learned that this internal rumor is borne out by several sources within the venture capital community, who have been speaking to Weiner very recently about coming there as an executive in residence.

The obvious candidates for a new home for Weiner are the top firms, such as Accel Partners and Greylock Partners and perhaps even Benchmark Capital or Sequoia Capital, all of which have ties to Yahoo and have several former Yahoos on staff.

A Weiner departure would leave a big hole at Yahoo, and it is not clear which of his top four SVP reports would take his place–Front Door and Network Services’ Tapan Bhat, Brad Garlinghouse, who heads Yahoo’s communications and communities arenas, Media Group head Scott Moore and Yahoo Search’s Vish Makhijani–if at all.

Or even if Yang and Decker will keep the same setup in place.

That might mean another reorg, which has long been a specialty of Yahoo, to reorder its divisions even more leanly or to put more revenue accountability within the units.

Right now, that responsibility lies primarily with Hilary Schneider (pictured here), EVP Global Partner Solutions, who runs all ad sales.

Of all the top execs–even though she has reportedly been offered many jobs outside Yahoo–Schneider is expected to stay, having been brought into Yahoo more recently by Decker.

Translation: She is not exhausted by all the drama at Yahoo quite yet.

Gas prices through the roof?

Mortgage crisis continues?

A looming recession?

You almost have to admire Web 2.0’s fight for their right to party.

Last night, it was quite a festive mood, as a mess o’ tech press and a bunch of digital movers and shakers showed up at OutCast Communications’ Seventh Annual CEO Dinner, held in the Grand Hall of San Francisco’s historic Ferry Building.

Big clients of OutCast include Facebook and Yahoo, as well as a lot of hyper-trendy start-ups.

Here is a lovely video I did, featuring OutCast’s T.J. Snyder and Margit Wennmachers, investor Ron “Sister Woman” Conway, Yahoo (YHOO) communications czar Brad Garlinghouse and PR’s Nicki Dugan, Facebook’s Brandee Barker, VC Stewart Alsop and the incomprehensibly iPhone-addled Robert Scoble:

Recently, BoomTown, along with a passel of press, was invited to an outreach dinner, set to be held on June 9 at a San Francisco venue, with some top Yahoo (YHOO) execs.

This was somewhat of a big deal, given the typically cave-dwelling mentality of the company in recent days, due to the drama of the Microsoft (MSFT) takeover bid that has jacked Yahoo’s typically skittish approach to press relations up to dangerously shy levels.

Thus, the appearance of a herd of important ones felt epic: Network head Jeff Weiner, along with a trio of SVPs–Front Door and Network Services’ Tapan Bhat, Brad Garlinghouse, who heads Yahoo’s communications and communities arenas, and Yahoo Search’s Vish Makhijani.

The point? To talk up all the various initiatives at the company and to try to focus on the actual operating units, rather than the endless MicroHoo drama that has consumed every little bit of mindshare related to Yahoo.

The operating units at Yahoo have, in fact, been largely kept out of the acquisition maelstrom, except for being drawn in to comment on the feasibility of various schemes like a Google (GOOG) search-ad outsourcing deal.

Then the dinner was canceled last week suddenly, with organizers blaming scheduling issues.

That move set tongues wagging at Yahoo’s Sunnyvale, Calif., HQ, of course, and sources inside the company began to pepper BoomTown with two key theories.

The first: That Yahoo was very close to a deal with Microsoft, which could come over the weekend, and therefore it did not want to be trotting key execs in front of the press at what might be a delicate time.

While the cancellation of the dinner apparently came from corporate, at this moment–which could change at any moment, of course–that seems unlikely.

While many feel like Microsoft’s only way to best rival Google is to renew its efforts to buy Yahoo and is the only true option that would give the software giant any kind of real scale in the search arena, several sources told me that Microsoft is currently in a wait-and-see holding pattern as it considers its various alternatives.

“Microsoft is in no rush with Carl Icahn doing all the heavy lifting,” said one source, referring to the hopping-mad billionaire investor who is waging a proxy fight against Yahoo.

Another said the company is in a deep evaluation mode on what to do with plenty of time to contemplate its options, especially since Microsoft now has major Yahoo shareholders pining for a $33 per share price, rather than the higher figures once bandied about.

And, except for the threat of a Yahoo-Google search-ad hookup, which has been pending for a while, noted the source, “[CEO Steve] Ballmer does not have to move yet.”

BoomTown, of course, has disagreed with this strolling-in-the-park mentality, because if Microsoft is truly committed to the online ad space, it has to just take a flyer and buy Yahoo.

But an even more intriguing second theory surrounded Weiner (pictured here), the high-profile exec who is in charge of Yahoo’s many products from content to email to search to communities.

Several execs at Yahoo suggested to me that the reason for the cancellation was because he might be on his way out the door soon, a rumor that was started when Weiner took two weeks off upon the recent birth of his first child (Hey, congrats! Try to get sleep before colic starts in!) and then extended the leave two more weeks.

But after a bit of BoomTown sleuthing, it seems that a Weiner departure is not imminent–at least for now–and that he is likely to be back on the job after he perfects the art of swaddling. (Some advice for Jeff: Surrender now.)

But the notion of what the future holds for high-ranking execs like Weiner got me thinking that it is likely Yahoo will have to grapple with the issue more seriously in the coming months.

And the question of how Yahoo is going to hang onto top talent–while it sits in what is essentially a limbo until its August board meeting resolves the Icahn fight–is a very important one going forward.

Because if Yahoo manages to remain largely independent, there will still be the nagging question of who should be the leaders of the company, especially given the buzzsaw that CEO Jerry Yang and President Sue Decker have been and will continue to go through.

And, if it gets bought, likely by Microsoft, a lot of key execs will obviously be faxing off their resumes, despite what are likely to be huge retention packages.

In both cases too, one must factor in sheer exhaustion brought on by the turmoil among the Yahoo troops, which cannot be underscored enough.

In many more conversations I have had with employees of late, there is a decided increase in the weariness factor with the situation and a feeling that the road ahead will be even more daunting.

And how to overcome that will be perhaps the greatest mystery of all for Yahoo’s leadership to solve going forward.