Yahoo is reorganizing and Wall Street has the scent of Terry Semel's blood in its nostrils.

Reuter's Eric Auchard reports that CFO Susan Decker, long seen as a major candidate for Semel's job, will head the profitable online advertising unit. The other unit will focus on marketing and international. With Decker taking the advertising helm, COO Dan Rosensweig is leaving the company.

As for Semel he says he has no plans to leave the company and is energized by the changes. But a key Semel hire, Lloyd Braun, who Semel brought over from ABC to integrate Hollywood content with Yahoo, is also leaving, signalling that Yahoo may be jettisoning the Hollywood approach.

The reorg comes fast on the heels of the Peanut Butter Manifesto, an internal memo that said the company suffers from too many redundant products, too many layers of managment and too few repurcussions for failure. The company, the memo said, spreads itself thin like peanut butter and is afraid to pass on any opportunity.

"This is just the beginning of what Yahoo needs to do," said RBC Capital Markets analyst Jordan Rohan in New York.

"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."

Rohan argues that Yahoo faces less competition from Google, but, like Google, it must become more nimble in order to grasp emerging opportunities on the Internet, where two- or three-year-old companies frequently set the industry's agenda.

"The competition with Google in search is done. Google won," Rohan said. "But Yahoo has a real audience advantage in everything except Web search," he said of its vast audiences for e-mail, instant messaging, news and other properties.

That's the analyst perspective. For the blogger/reporter perspective, consider Fred Vogelstein, a contributing editor at Wired. His take:

Will these changes shake things up enough so that Yahoo can begin to win back the business it has lost?

I don't know myself, but I can tell you this: A half dozen former execs I have talked to about this in the past few days don't think so. They say that Yahoo's problems run deeper than anything a reorg can fix. They say that Yahoo is an organization that still doesn't know what it wants to be or stand for. Is it a media company or a technology company? Is it a portal or a social network? Is it more interested in hits or in the power of user generated content on the long tail? And is it willing to spend the money necessary to compete with the likes of Google and Microsoft who have committed to spending billions on server farms and high priced engineering talent?

Their solution? Terry Semel needs to resign and Yahoo needs to appoint a seasoned, dynamic technology executive to lead it. Why? Because Yahoo has fallen so far behind on Semel's watch and because Google has demonstrated that victory in the fast evolving world of web advertising will go to the team that has the best technology. That means that Semel, who by his own admission is not a technology executive, is the wrong man for the job.

Well, agreed that this reorg is not the be-all-end-all solution to Yahoo's woes. Ultimately, it's just a holding pattern. The board wants to see what Decker can do with ful control of the advertising side. If she can deliver innovative new ways to monetize Yahoo's properties and keep the ad dollars ka-chinging, I bet that they will hand her the CEO job on their knees. But of course she is not a technology-based CEO either. But as a long-time tech analyst she may have the understanding of technology to figure out how to drive the company to where it needs to go.

Google's strength is that it knows it's a technology company and it can deliver all kinds of value and figure out ways to monetize from that base. As Rohan says, Google has won search and that gives them a huge advantage. Yahoo will have to figure out its core. It should be technology but it can't be search. The idea that new forms of advertising can be integrated into a range of properties makes sense. What that will look like, I'm not sure.