Yahoo has announced a restructuring drive, as it attempts to simplify its business and take on rival Google.
Yahoo is a major player on the internet
The US web giant said chief financial officer Susan Decker would lead a new advertising unit, positioning her as a possible future chief executive.
Meanwhile, chief operating officer Daniel Rosensweig - a rival for the top job - will leave Yahoo in March.
The shake-up at Yahoo's key advert and marketing units comes as the firm faces tougher competition on the internet.
The pioneering internet firm has struggled with the changing nature of website advertising, as firms chase younger customers on a growing number of social networking sites including MySpace and Facebook.
Yahoo lost out to internet search rival Google earlier this year, which snapped up video-sharing firm YouTube for $1.65bn (£837m).
The firm's latest quarterly results also saw it report a 37% drop in quarterly profit, sparking alarm among senior managers headed by current chief executive Terry Semel.
But Yahoo remains a major force on the internet, and it believes the reorganisation will help it continue to grow.
The company will be split into two key divisions - Audiences, which will control search, media and communication products and services; and Advertisers and Publishers, which will focus on ads aimed at users.
"This is just the beginning of what Yahoo needs to do," said Jordan Rohan, an analyst with RBC Capital Markets.
"It may take all of 2007. Change like this is evolutionary, not revolutionary. The new division heads will need time to grasp the enormity of the task at hand."