A major executive reshuffle at Yahoo! has been announced, aimed at simplifying the sprawling internet giant and bolstering its flagging financial performance.

Under the plan, chief financial officer Susan Decker will head a newly formed division focused on advertising. The sector is Yahoo's most important source of revenues, but has fallen way behind the market leader Google.

In a surprise move, chief operating officer Dan Rosensweig will leave the company.

The moves single out Ms Decker as a potential successor to Terry Semel, Yahoo!'s embattled chief executive and chairman.

The pressure on Mr Semel, who has been forced to apologise for Yahoo’s disappointing financial performance this year, was ramped up last month when a highly critical memo written by one of his lieutenants, Brad Garlinghouse, was leaked.

In the memo - dubbed the "peanut butter manifesto" - Mr Garlinghouse argued that Yahoo! had spread itself too thin across too many businesses.

The view echoed that of much of Wall Street. In a challenge to Mr Semel's stategy, Mr Garlinghouse said that "heads must roll" and that Yahoo! should shed 20 per cent of its workforce - or 2,000 jobs.

Under Mr Semel's reshuffle, Mr Rosensweig, who was understood to have asked Mr Garlinghouse to head a group looking at the issues raised in his memo, will leave next year.

Media Group chief Lloyd Braun, who was brought in to oversee Yahoo's developent of its own content, will also go.

But Mr Semel has ruled out cutting Yahoo's overall head count, insisting the group will continue to hire.

Analysts said that the changes were cautious and could only be considered "a first move".

The closely read Techcrunch blog said: "The Brad Garlinghouse memo may have been the catalyst but it’s possible that this is only the ceremonious opening of the floodgates.

"If Yahoo is really serious about redirection, then no senior executive, particularly Semel, is safe from the chopping block."

It had been thought that Mr Semel was being urged by some of his own executives to repeat a cull resembling that he embarked on when he joined Yahoo! from Time Warner in 2001. Then, 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.

Instead he said that Yahoo would now "organise its services around audience segments and advertising customers, rather than around products".

He added: "We’re moving aggressively to deliver the most possible value to our key customers - audiences, advertisers and publishers - and seize the major new opportunities we see ahead for the internet."

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). Google said its profit nearly doubled for the equivalent period.

Shares of Yahoo are down about 30 per cent this year, while Google shares are up about 17 per cent.

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