Yahoo Inc. announced its biggest executive shake-up in more than five years, including placing chief financial officer Susan Decker in charge of ad sales in a move that may signal her anointment as successor to the company's top job.
Shares of Yahoo, which have struggled this year as the stock of competitor Google has flourished, fell 57 cents, or 2 percent, to close at $26.86 Wednesday on the Nasdaq Stock Market.
Under the overhaul announced late Tuesday, Yahoo vowed to rein in a sometimes-rambling product expansion that has bogged down its earnings growth and threatened its position as the Internet's most popular site.
The streamlining will bunch Yahoo's disparate operations into three core groups focused on its Web site's audience, advertising network and technology.
Decker will assume an even more prominent management role and Dan Rosensweig, the company's chief operating officer, will leave the company in March when the makeover is expected to be completed. Lloyd Braun, a former executive for ABC who ran Yahoo Media Group, also resigned.
Farzad Nazem, Yahoo's chief technology officer, will remain in that position.
Yahoo of Sunnyvale, Calif., plans to hire a new executive to run the unit focused on satisfying Yahoo's 418-million registered users. Like Decker and Nazem, the new executive will report to chairman Terry Semel, who will remain chief executive despite recent criticism of his performance.
But Decker's promotion appears to anoint her as the 63-year-old Semel's likely successor. Highly regarded by investors, Decker will remain CFO until a replacement is found.
Yahoo's restructuring comes just a few weeks after a senior vice president blasted the company -in an internal memo leaked to the media - for losing its focus.
The memo, written by Brad Garlinghouse, was promptly nicknamed the "peanut butter manifesto" because it likened the company's recent strategy to "spreading peanut butter across the myriad opportunities that continue to evolve in the online world.
The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular."
Garlinghouse envisioned a more radical reorganization that would have laid off 15 to 20 percent of Yahoo's roughly 11,000 employees. The overhaul announced Tuesday didn't mention any planned layoffs.
As it is, the changes mark Yahoo's most extensive housecleaning since co-founders Jerry Yang and David Filo recruited Semel - a former movie studio executive - to lift the company out of the dot-com doldrums in May 2001.
Semel melded dozens of Yahoo divisions into more cohesive units and jettisoned hundreds of jobs in a traumatic makeover that eventually paid off when advertisers began to flock back to the Internet in 2003 and 2004.
The turnaround lifted Yahoo's stock from a low of about $4 per share in 2001 to a high of $43.45 late last year.
But Yahoo has been struggling most of this year as Internet search leader Google Inc. proved far more proficient at delivering ads that captured the attention of Web surfers.
Yahoo says it is in the process of introducing significant improvements to its system that will produce higher advertising commissions next year.
While Google's market value has climbed by 17 percent so far this year to $149-billion, Yahoo's has shrunk by 30 percent to $37-billion.