Yahoo on Thursday announced a corporate overhaul in the face of stockholder rebellion and front-office desertions.

The re-organisation comes as Yahoo fights off an attempted coup by corporate raider Carl Icahn and watches dozens of high-ranking executives dash for the exits.

More than 50 executives have left the once high-flying firm since Microsoft went public with a takeover offer in early February.

In part to stop the bleeding, Yahoo is realigning resources into three teams reporting to company president Sue Decker.

Yahoo also said it is prioritising what is known as "cloud computing," a trend in which internet firms such as Google, Microsoft, and Salesforce.com provide software programs as services that people use online instead of installing and operating on their own machines.

"These moves accelerate the ability of our deep and talented team to build great products, grow our audiences and improve monetisation globally," Yahoo chief executive Jerry Yang said on Thursday.

Microsoft offered to buy Yahoo for $48.6-billion in stock and cash earlier in the year but withdrew the offer on 3 May, saying Yahoo refused to budge.

Analyst Rob Enderle of the Enderle Group in Silicon Valley likened Yahoo's reorganisation with the crew of the doomed transatlantic Titanic oceanliner scrambling to correct course when it was too late.

"Yahoo is making critical changes that would have helped them avoid the iceberg, but unfortunately it comes after they hit it," Enderle said.

"The problem is that everything Yahoo is doing is strategic with long-term benefit and they just don't have the time. I don't think their investors are in it for the long term."

Abandon ship

Meanwhile, Yahoo executives have been abandoning the Yahoo ship at breakneck pace.

"Microsoft has been aggressively fishing Yahoo with newspaper ads and head hunters," Enderle said. "Google is probably doing it too, only less overtly. Yahoo is a fishing ground. They've bled a lot of people."

Technology blog TechCrunch has devoted a page to tracking the exodus, and a "Yahoo! Alumni" group on social networking website Facebook reports having swelled to more than 1800 members.

Yahoo's reorganisation is intended to speed up bringing products to market and expedite decision making, according to Decker, who suggested the re-organisation was in the works before the latest turmoil.

"We have planned these changes deliberately over the past several months to clarify responsibilities and to capitalise on the scale advantages while allowing for fine tuning to meet local market needs," Decker said.

It remains to be seen whether the changes will quell an Icahn-led rebellion at an annual meeting of shareholders set for 1 August at the Yahoo campus in Sunnyvale, California.

Yang and Yahoo board chairperson Roy Bostock revealed that Microsoft suggested a "search-only hybrid proposal" in which it would buy Yahoo's online search business for a billion dollars plus a percentage of future ad revenues.

The offer included Microsoft making an eight billion dollar investment in Yahoo, but would have barred Yahoo from making search deals with anyone else.

Revealing that Microsoft was willing to enter into a multi-billion-dollar alliance with Yahoo even after takeover talks failed could work in Icahn's favour.

"You have a large audience of investors taking it hard in the pocketbook and looking for some way to offset that," Enderle said.

"If Icahn wins, the stock will rebound overnight," he added. "The leadership at Yahoo has lost track of the kind of pain their investors are living through right now."

AFP