Some high-ranking Yahoo! executives have taken on new roles at the Web portal, as newly appointed chief executive Terry Semel settles into his two-month-old job with a little help from his friends in Hollywood. Semel has been discussing strategy with a group of former top managers from Time Warner's defunct Entertaindom Internet venture, according to knowledgeable sources, while key members of Yahoo!'s old guard have moved into new roles. Most significantly, chief operating officer Jeffrey Mallett has passed off many of his day-to-day responsibilities to focus on developing Yahoo!'s international businesses, according to a company spokeswoman. Day-to-day responsibilities now largely fall to Gregory Coleman, North American operations executive president, who joined the company from Reader's Digest in April. Coleman continues to report to Mallett. The transition comes as Yahoo! struggles to reverse a string of setbacks brought on by the sudden downturn in the online advertising market. Filling the chief executive slot with Semel, a former Hollywood movie mogul, has raised a cloud of speculation over the company's possible direction -- ranging from an outright sale to the development of new premium services focusing on the entertainment market. Mallett's position is among the most closely watched in the company. Credited with helping lead Yahoo!'s meteoric rise but partially blamed for its recent setbacks, Mallett was passed over by Yahoo!'s board of directors after former chief executive Tim Koogle stepped down, sources close to Yahoo! said. Yahoo! denied that the shift signaled Mallett's waning influence in the company. "We just put in another layer so [Mallett] can focus more on global and high-level strategy," said a Yahoo! spokeswoman. "All those people that used to report to Jeff now just report to Greg, and Greg has direct line to Jeff." Yahoo!'s management changes have been kept quiet until now, but analysts expect the full scope of the transition to come into focus within the next few weeks. Semel is expected to shed light on his plans when Yahoo! reports its second-quarter earnings 11 July. Though Yahoo! has denied that Mallett plans to leave the company anytime soon, the selection of Semel was widely seen as a slight that could cause him to reassess his future with the company. Mallett could not immediately be reached for comment. Meanwhile, Semel is tapping some former Hollywood associates to help resuscitate the company, sources close to Yahoo! said. Semel has been in contact with former Warner Brothers confidantes, including Jim Moloshok, the former president of Warner Brothers' shuttered Entertaindom Web site, and Jim Banister, Entertaindom's former vice president. Semel is considering hiring the two executives for positions at Yahoo!, according to sources, but has not made a formal offer. It also is not certain whether the two executives would accept job offers, the sources added. Moloshok and Banister left Entertaindom shortly after Time Warner scrapped plans to spin off the site as a publicly traded company. Both executives have worked closely with Semel at Windsor Digital, Semel's online investment company. "I almost definitely think he will bring more people" from Hollywood, said Safa Rashtchy, an equity analyst at US Bancorp Piper Jaffray. Rashtchy anticipates that Semel will disclose more details about his plans when the company reports earnings. Semel has already hired Jeff Weiner, former chief operating officer at Entertaindom, as part of Yahoo!'s corporate development department. Semel also brought in Toby Coppel, a former banker at media power broker firm Allen & Company Both carry the title "corporate development," according to the company spokeswoman. The appointments could be a sign of things to come. Formerly, Ellen Siminoff, now the senior vice president of entertainment and small business, served as the head of corporate development, which was a separate department in the company. A Yahoo! spokeswoman in April said the company had decentralised corporate development efforts to individual divisions. But it's unclear whether that still holds true, given the roles assigned to Weiner and Coppel. Semel was primarily tapped to help Yahoo! stem a steep decline in online advertising. Since the beginning of the year, the company -- once a Wall Street darling -- has reported two consecutive quarters stained by revenue warnings and the resignation of longtime chief executive Koogle. Yahoo! shares closed at $19.14 Tuesday, down from a 52-week high of $142.68. The shares traded around $17.50 when Semel joined the company. Wall Street has continued to express scepticism about what Semel brings to the table. Despite his distinguished career as the longtime Warner Brothers studio chief, analysts have questioned whether his lack of advertising sales experience could be a liability as the company attempts to fix its immediate problems. But having Hollywood connections may not be all bad, especially given Yahoo!'s increased entertainment focus. The company already has a deal with Pressplay, the online music-subscription service from Vivendi Universal and Sony. It also recently relaunched Yahoo! Broadcast, which streams video and audio clips over the Internet. Exclusive content could also serve as a foot in the door to streaming content on a subscription basis, which would help Yahoo! diversify its revenue. The question now turns to how much Semel might bring Hollywood culture into one of the emblems of Silicon Valley, and whether that culture could give Yahoo! what it needs to turn around. Wit SoundView equity analyst Jordan Rohan questioned Semel's appointment as weak on experience in advertising sales -- Yahoo!'s main source of revenue -- while downplaying the short-term importance of entertainment programming for the portal. "That business model hasn't worked for a lot of people. I'm not optimistic that it would work for Yahoo!," he said. Rather than citing the Hollywood connection, Rohan pointed to former Reader's Digest executive Coleman as an example of the kind of management the company might benefit from now. "I view him as somebody who understands what advertisers really want, who will embrace the advertising community, and who will in turn improve Yahoo!'s long-term position," Rohan said. But, "that's not a change that will occur overnight". Semel himself has yet to officially leave Hollywood's confines, still spending his weekends at home in southern California, though he intends to move to Silicon Valley, the Yahoo! spokeswoman said. When he was appointed to the position, Semel highlighted certain areas in Yahoo! that he wanted to grow. One of the most important areas was in premium services for which the company can charge people. Yahoo! already has premium services in areas such as email, sports and finance. But these are paid features added on top of existing free ones. Meanwhile, analysts said the company has been more low-key with Wall Street than ever. Besides the most obvious question of how Semel plans to stem Yahoo!'s falling revenue and exposure to a weak advertising environment, there are certain key executive positions that remain open. Vacant positions include top executives in sales and international, and general managers in Asia and Europe, to name a few. The Yahoo! spokeswoman said the company was in the process of recruiting to fill those positions, but analysts are beginning to grow restless. "My sense is if they don't have status updates in terms of who they're putting into those chairs, people will start to wonder why they're having such a difficult time filling them," said Jeffrey Fieler, an equity analyst at Bear Stearns. See techTrader for the latest technology business news. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the techTrader forum Let the editors know what you think in the Mailroom. And read other letters.