Yahoo is setting up a new chain of command amid the turmoil triggered by the embattled Internet icon's snub of Microsoft's $47.5 billion takeover bid.

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SAN FRANCISCO — Yahoo is setting up a new chain of command amid the turmoil triggered by the embattled Internet icon’s snub of Microsoft’s $47.5 billion takeover bid.

Under the new pecking order announced Thursday, executive vice presidents Hilary Schneider and Ash Patel are being given expanded responsibilities over the company’s products and sales teams.

Schneider, a former newspaper executive, has been moving up the ranks since she joined Yahoo in September 2006. Patel has played a key role in developing many of Yahoo’s most popular products, including its finance section and instant-messaging service, since joining the company 12 years ago.

Yahoo also is reorganizing its technology division in an effort to use its computing power more effectively and improve the coordination between its product developers and engineers.

This is the third time in 19 months that Yahoo has redrawn its management chart as it tries to snap out of a financial malaise that has ravaged its stock price, jeopardized its independence and demoralized employees.

In the other two shake-ups since November 2006, Chief Operating Officer Dan Rosensweig and Chief Executive Terry Semel resigned.

This time, both of Yahoo’s top executives — co-founder and CEO Jerry Yang and President Susan Decker — are staying put despite shareholder unrest about the company’s recent decisions.

Decker said that she and Yang had been working on the latest changes for several months as part of the company’s efforts to become a one-stop destination for online advertisers and build an even more appealing Web site for consumers.

The overhaul comes as the company tries to fend off a shareholder mutiny led by activist investor Carl Icahn and to fill a leadership vacuum created as dozens of senior managers and top engineers have headed for the exits during the past year.

Although he remains in charge, Yang might not be CEO much longer if he can’t placate Yahoo shareholders still upset about the company’s rejection of Microsoft’s $47.5 billion takeover offer.

Investors apparently weren’t impressed with Thursday’s shake-up. Yahoo shares fell 64 cents to finish at $21.37.

Yang is the focal point of shareholders’ wrath because his prickly relationship with Microsoft CEO Steve Ballmer culminated in the withdrawal of the software maker’s last oral offer of $33 per share. That offer was 72 percent above Yahoo’s stock price before the bidding began.

The final straw came May 3 when Yang demanded $37 per share, a price that Yahoo’s stock hasn’t reached in nearly two and a half years.

To make matters worse, Yahoo’s market value has dropped nearly $10 billion, or 24 percent, since Yang replaced Semel as CEO a year ago.

If he wins control of Yahoo’s nine-member board later this summer, Icahn intends to fire Yang as CEO. Shareholders get to pick between Yahoo’s current board — including Yang — and Icahn’s alternate candidates at Yahoo’s Aug. 1 annual meeting.

Icahn confirmed his plans Thursday in a Securities and Exchange Commission filing that also disclosed he now owns a 5 percent stake in Yahoo. If he overthrows the board, Icahn said he will publicly offer to sell Yahoo to Microsoft in a “friendly and cooperative” deal.