Slumping Yahoo to undergo biggest shake-up in more than 5 years; Decker to lead ad team

SAN FRANCISCO — 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 52 cents, or 2 percent, to $26.91 in morning trading 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 as more buzz built up around upstarts like MySpace and YouTube.

The streamlining will bunch Yahoo's disparate operations into three core groups focused on its Web site's audience, advertising network and technology.

As part of the reorganization, Decker will assume an even more prominent management role and Dan Rosensweig, the company's chief operating officer, will be shown the door 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.

Sunnyvale-based Yahoo 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.

"We're putting the right people in the right places to execute our focused growth strategy," Semel said in a prepared statement.

Yahoo's restructuring comes just a few weeks after a senior vice president blasted the company for losing its focus in an internal memo leaked to the media.

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."