Dec. 6 (Bloomberg) -- Yahoo! Inc. Chief Executive Officer Terry Semel promoted Chief Financial Officer Susan Decker to a new job overseeing advertising sales as part of a broader shake- up designed to catch up to competitors such as Google Inc.

Chief Operating Officer Dan Rosensweig will leave the company, owner of the most visited U.S. Web site, Semel said yesterday in an interview. Lloyd Braun, the former ABC television executive who ran Yahoo's media sites, also resigned.

Semel is reorganizing Sunnyvale, California-based Yahoo to confront Google, the world's largest search engine, and upstart Web sites including YouTube, now owned by Google, and MySpace, a part of News Corp. Decker's appointment gives her a bigger role in turning the company around and signals she is the top internal candidate to succeed Semel, who is 63.

``Sue Decker is now in a position to eventually lead Yahoo,'' said Scott Kessler, an equity analyst at Standard & Poor's in New York. He has a ``hold'' rating on the stock and doesn't own it. ``She has done a great job as CFO. A lot of people appreciate her command of the finances and her accessibility.''

Shares of Yahoo fell 57 cents to $26.86 at 4 p.m. in Nasdaq Stock Market composite trading. The stock's 31 percent drop this year contrasts with an 18 percent rise by Google.

Yahoo will create three groups. Decker, 44, will run ad sales, while Chief Technology Officer Farzad Nazem's group will be responsible for software, including new ad programs. Yahoo is seeking an executive to oversee an ``audience'' group that includes products such as search, where Google leads.

The company this year has delayed new advertising software while dealing with slowing demand from ad buyers in the automotive and financial-services industries.

`Reshaping Yahoo'

``We're reshaping Yahoo,'' Semel said yesterday in an interview. ``Under this structure, we can increase the speed of decision making.'' Semel doesn't expect the changes to have any impact on results in the next two quarters.

Analysts had mixed reactions. Imran Khan of JPMorgan Chase & Co., said in a note to clients that the changes may distract management and lead to employee defections. He has a ``neutral'' rating for the stock. Benjamin Schachter at UBS AG, who rates the stock ``buy,'' said that while the changes were ``positive,'' implementing them may drag on results.

``This is what they had to do,'' said Greg Sterling, an analyst at Sterling Market Intelligence in Oakland, California. ``They needed to do something bold, something that showed they are decisive.''

Growth Crimped

Yahoo's sales grew at the slowest pace in more than four years last quarter. Growth was crimped as sites such as YouTube and MySpace attract more users, and Mountain View, California- based Google extends its lead in Internet search.

Google handled 50 percent of U.S. searches in October, compared with Yahoo's 24 percent, said Nielsen//NetRatings, a New York-based market researcher. In the third quarter, Yahoo's sales rose 19 percent to $1.58 billion, while Google's gained 70 percent to $2.69 billion.

``All companies that have four or five fabulous years in a row are OK to slow down a little bit, take a breath,'' Semel said. ``We have a great, great opportunity to capture a lot of future growth.''

Decker's Role

The changes mark a more prominent role for Decker, who joined Yahoo in 2000 as chief financial officer. In September, she took over Yahoo's Marketplaces unit, including its autos, classifieds, real estate and shopping Web sites.

``This clearly makes Sue Decker the odds-on candidate to succeed Terry Semel,'' said Jordan Rohan, an analyst at RBC Capital Markets in New York. He rates the shares ``outperform'' and doesn't own them.

Decker will continue to serve as chief financial officer until a successor is found.

Before joining Yahoo, Decker was global director of equity research at investment bank Donaldson, Lufkin & Jenrette, where she worked for 14 years. She has a bachelor's degree from Tufts University and a Masters of Business Administration from Harvard University.

Rosensweig will leave at the end of March. He was one of the architects of the company's new structure, Semel said. He joined Yahoo in 2002 from Cnet Networks Inc., a technology news and reviews site, where he served as president.

Braun, the former chairman of ABC television, joined Yahoo in 2004. At ABC, he oversaw development of shows including ``Alias'' and ``Lost.'' At Yahoo, his plans to develop original content were scaled back, with the company focusing on sites including Yahoo Food, Yahoo Tech and an online talent show.

Still Looking

While Yahoo is still looking for an executive to oversee the ``audience'' group, Jeff Weiner, a senior vice president who led Yahoo's search business, will run a part of that group called the Yahoo Network. Braun would have reported to Weiner.

Yahoo Network will include the media unit currently led by Braun, the Yahoo home page and communications products, Semel said.

The changes, which will be complete by the end of the first quarter, come after investors and Yahoo employees have called for a shakeup at the company.

In a memo last month, senior vice president Brad Garlinghouse recommended cutting staff by as much as 20 percent. The memo, called the ``The Peanut Butter Manifesto,'' said too many employees had overlapping responsibilities.

Semel said today Yahoo will continue to hire. ``We are 100 percent organizing for growth,'' Semel said. ``We're continuing to hire.''

Advertisers are starting to use Yahoo's new system for selling search ads, Semel said. He reiterated that Yahoo will change the way ads are displayed in the first quarter.

To contact the reporter on this story: Jonathan Thaw in San Francisco at jthaw@bloomberg.net.

Last Updated: December 6, 2006 16:18 EST