A leaked internal e-mail dubbed the "Peanut Butter Manifesto" has revealed a boardroom rift at Yahoo! that could cost 2,000 employees their jobs, including embattled chief executive Terry Semel.

The unrest among Mr Semel's lieutenants was made clear in a memo written by Brad Garlinghouse, the Yahoo! senior vice president who heads the group’s e-mail and instant messaging units.

In the document, sent to senior staff, Mr Garlinghouse said Yahoo! had spread itself too thin across a wide range of online services and called for the group to sell non-core businesses and cut its headcount by up to 20 per cent.

"Heads must roll" Mr Garlinghouse said, "change is needed and it is needed soon."

He added: "I’ve heard our strategy described as 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."

The memo overshadowed Yahoo's announcement today that it will partner with seven newspaper groups, representing 176 daily papers, to put classified jobs adverts online and share advertising revenues.

A Yahoo! spokesman said in a statement: "The memo itself highlights that we have an open, collaborative culture and a senior management team that is intensely committed to helping Yahoo! fulfill its potential as an internet leader."

However, the criticisms echo Wall Street’s concerns over Yahoo!’s recent performance and highlight the vulnerability of Mr Semal, analysts said.

Shares in the company, a dot-com pioneer whose portfolio ranges from online dating to e-mail, e-tail and social networking, have fallen by a third this year after a string of profits warnings and technology glitches. The plunge stands in stark contrast to the strong performance of arch-rival Google, which has extended its lead in the crucial online advertising market.

There are also suggestions that Mr Garlinghouse’s criticisms have been accepted by other senior executives. According to the Wall Street Journal, chief operating officer Dan Rosensweig has asked Mr Garlinghouse to head a group of Yahoo! staff looking into the issues raised in the memo.

But Silicon Valley observers have suggested Mr Garlinghouse’s fierce criticism of Yahoo!’s set up make the prospect of him working with Mr Semel untenable.

Apparently criticising the culture fostered by Mr Semel, Mr Garlinghouse said: "We have lost our passion to win. Far too many employees are 'phoning' it in, lacking the passion and commitment to be a part of the solution. We sit idly by while - at all levels - employees are enabled to "hang around". Where is the accountability?"

The memo also questioned Yahoo!'s M&A strategy under Mr Semel, with Mr Garlinghouse highlighting the duplications between existing Yahoo services and acquisitions including Flickr, the image-sharing site, and Deli.cio.us, the social networking service.

Mike Arrington, author of the closely read Techcrunch blog, said: "This is Yahoo’s dirty laundry spread all over the world for everyone to see, and it voices a frustration that suggests CEO Terry Semel’s chief lieutenants are restless and frustrated."

He added: "I don’t see how Semel and Garlinghouse can both remain at Yahoo. From what I’m hearing, Semel may be the one to lose."

Amid mounting competition, Mr Semel has already acknowledged that Yahoo! needs to refocus its business. After unveiling another set of poor financial figures last month he said: "We've got to get back to basics and again zero in on a few key priorities."

The comments came as Mr Semel came under pressure to repeat the cull he embarked on when he joined Yahoo! from Time Warner in 2001. He reduced the company's 44 divisions to just four, slashed 10 per cent of the workforce and bulked up Yahoo!’s search and advertising units.

This year Yahoo! has given warning on profits three times, sending its shares tumbling on each occasion. Last month Mr Semel was forced to admit that he was "not satisfied with our current performance" after unveiling third-quarter profits down 37 per cent to $159 million (£85 million).

Revenues were up 20 per cent to $1.12 billion, but failed to meet the group's own projections as internal costs rose more sharply than had been expected.

Mr Semel said that while graphical advertising was still growing at 31 per cent, the company was no longer outperforming the exploding market. Meanwhile, search engine advertising growth came in at 13 per cent in the third quarter, reflecting a decline in share in search traffic in the United States.

However, Yahoo! still owns the world’s most-visited website, generating nearly four billion page impressions a day, a figure that is up by 24 per cent year-on-year according to figures released by Sue Decker, the chief financial officer.

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