Yahoo shakes up ad departments

SAN FRANCISCO — Yahoo said Sunday its chief domestic sales officer had resigned and that it will merge its search and display advertising departments in the U.S. as the Internet powerhouse fights to catch up with online search leader Google.

Yahoo said it hopes the latest shake-up will streamline its sales to advertisers, who increasingly want a variety of formats, from being linked to search terms to popping up as a graphical display to being shown as video.

The reshuffling follows last week's executive overhaul in which Yahoo co-founder Jerry Yang replaced Terry Semel as chief executive.

In the latest change, Yahoo said Wenda Millard, chief sales officer in the U.S., had left the company.

Millard immediately announced she will be president of media for Martha Stewart Living Omnimedia and that she bore no ill will toward Yahoo.

Millard will oversee the company's publishing, Internet and broadcasting work.

David Karnstedt, previously senior vice president of Yahoo's search sales business, was tapped to lead the newly combined sales teams as head of North American sales.

Yahoo has been looking for ways to gain ground on Google in the lucrative online advertising market, where Yahoo ranks a distant second despite once being the larger of the two companies.

One major hope for Yahoo is the upgraded advertising system it introduced in February.

However, the payoff from that system isn't expected to start materializing until later this year.