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Yahoo! Restructuring Will Focus on 3 Main Divisions

The San Jose Mercury News has obtained an internal memo from Yahoo that reveals the company's plans to restructure and focus on three primary divisions: Consumer, Regions and Technology.

Yahoo CEO Scott Thompson plans to discuss the changes outlined in the memo sometime on Tuesday during an "all-hands" meeting with employees. The news arrives just one week after the former search engine champ cut around 14-percent of its entire workforce.

"To be very clear, our highest priority is winning in our core business and that will earn us the right to pursue new growth opportunities," Thompson wrote in the memo, which was sent to employees Tuesday.

According to the memo, Yahoo will consolidate its consumer-based products into a new "Consumer" division that will control Yahoo's popular news sites, home pages, its search and its email functions. It will also house a new "commerce" team that will be responsible for the e-commerce as well as the company's shopping, autos, travel and job listings.

This new "Consumer" division will be ruled by Ross Levinsohn, a former Fox Interactive executive who has been running Yahoo's American operations. He will oversee the homepages and other media content. Search chief Shashi Seth will also take command of the "Consumer" division and manage the search and social media functions. The division will also gain product development staff, including designers and engineers.

The second new division will be called "Regions" which will be responsible for managing advertisers in the major geographic regions of the world. The third division will be called "Technology" and will be responsible for Yahoo's core technology, data centers and using what Thompson described as "Yahoo's vast data stores" to create more personalized content and advertising. Yep, that sounds a little scary.

The memo also stated that former Yahoo Chief Product Officer Blake Irving will be leaving the company. However Irving will work with other Yahoo executives to ensure a smooth transition in coming weeks.

Thompson reportedly told employees that he waited a week to reveal his new restructuring plans out of respect for those who were terminated last week. But that didn't stop disgruntled investors from criticizing Thompson over announcing the layoffs before he outlined his plans for the struggling company. Still, Wall Street analysts are quite eager to hear what Thompson has to say when he announces Yahoo's first-quarter earnings next week.

So far Thompson hasn't explained how he plans to use Yahoo's data on web traffic and user interests, but that too might be revealed next week.