Yahoo creates 3 new divisions in operations reorganization

SAN FRANCISCO -- Yahoo on Thursday said it would create three new divisions to help centralize its Internet products, build its worldwide audience and better capitalize on the growth of online advertising.

Under the reorganization, Yahoo Executive Vice Presidents Ash Patel and Hilary Schneider are being promoted to oversee most of the Silicon Valley company's products.

Yahoo says there are no layoffs as part of the corporate realignment.

Company co-founder Jerry Yang, who is under shareholder fire for his handling of the Microsoft bid, remains CEO. His second-in-command, Susan Decker, remains Yahoo president.

This is the third time in 19 months that Yahoo has shuffled its management ranks as it tries to snap out of a financial malaise that has thrashed its stock price and demoralized employees.

"These moves accelerate the ability of our deep and talented team to build great products, grow our audiences and improve monetization globally," Yang said in a statement. "They are designed to put us in an even better position to leverage our leading global audience and capture the opportunity we see in the convergence of search and display advertising."

The reorganization comes a day after Yahoo officials told shareholders that the search-engine advertising pact it signed with Google this month was "financially attractive." In a letter, Yahoo said the deal would do more for stockholder value than Microsoft's $1 billion, search-only proposal.

Yang and the Yahoo board face a proxy battle from investor Carl Icahn when Yahoo shareholders meet Aug. 1. In his latest proxy filing Thursday, Icahn renewed pressure on Yahoo to strike a merger deal with Microsoft and replace Yang. Yahoo shares dipped 3%, to $21.37, in trading. Microsoft fell 2%, to $27.75.