Yahoo Inc. (Nasdaq: YHOO) said on Sunday that it will unify its search and display advertising teams in a move to better compete against rivals. Meanwhile, the company’s chief sales officer resigned.

The company hopes the new restructuring will allow it to streamline the way it sells advertising, allowing customers to buy ad-packages that include that will run across a number of formats, but linked through backend operations.

Integrating our world-class search and display sales teams...will allow us to better serve all of our advertisers' marketing objectives ranging from brand awareness to direct response, said Sue Decker, President of Yahoo.

The internal merger comes after the company's chief sales officer, Wenda Millard, resigned and left to Martha Stewart Omnimedia.

Millard handled Yahoo’s display advertising and was an industry veteran who helped the company's reputation with mainstream advertisers. Yahoo said the company needed a person with different abilities.

“While Wenda was a big contributor to our success in the past, the industry has shifted and requires a different set of skills to take the business forward, said Greg Coleman, executive vice president of global sales.

Brian Pitz of Banc of America said Millard's departure could impact Yahoo's advertising business, however, noting she has been critical to Yahoo's efforts to move offline advertising dollars online.

Wenda follows a string of major reorganizations as the company struggles to keep up with rivals, such as Internet search leader, Google, Inc.

Last week Terry Semel, the chief executive stepped down to assume the position of nonexecutive chairman while co-founder Jerry Yang took his position.

While the company’s websites attract the most unique visitors compared to any other site, Yahoo has has fallen behind in search, advertising, and most recently, social networking platforms, such as MySpace and Facebook.

Shares of Yahoo rose 26 cents, or 95 cents to reach $27.64 by the end or regular trading hours on the Nasdaq Stock Market.