Yahoo! Inc. Chief Executive Officer Marissa Mayer hired KenGoldman to succeed Tim Morse as chief financial officer, making herbiggest management change yet after taking the reins of thestruggling Web portal.

Goldman was previously chief financial officer at Fortinet Inc.,a provider of computer-network security. His appointment iseffective Oct. 22, while Morse, who joined in 2009, is leavinglater this year, Sunnyvale, California-based Yahoo said in astatement yesterday.

Mayer, who joined in July, is realigning leadership in her driveto reverse three years of declining revenue and market share lossesto Facebook Inc. and her former employer, Google Inc. She may seekto impose fiscal discipline by hiring Goldman, who has helped cutcosts and improve oversight at Silicon Valley companies over thepast three decades, said Erik Suppiger, an analyst at JMPSecurities LLC in San Francisco.

“He was brought into Fortinet a few years ago to improve on thecompany's controls,” Suppiger said in an interview. “Investors havea relatively high regard for him.”

Yahoo said in August that Mayer would embark on a review of thebusiness, including its growth and acquisition strategy, its cashposition and capital allocation plans. A plan to cut about 2,000jobs and reorganize the company, disclosed in April under then-CEOScott Thompson, is also up for review.

Cost Cutting

Goldman was known for trimming expenses at Siebel Systems, wherehe worked as CFO for six years prior to joining Fortinet, saidHowie Shohet, an executive who reported to Goldman while at thecustomer management software maker.

“He was very operationally inclined, very effective at costsaving,” said Shohet, who is now chief financial officer at SanMateo, California-based Lattice Engines. Goldman focused on“streamlining and rationalizing” the investments Siebel was making,Shohet said yesterday.

At Siebel, which was acquired in 2006 by Oracle Corp., Goldmanand other executives came under the scrutiny of the Securities& Exchange Commission, which said he selectively disclosedmarket-moving information. The company paid a $250,000 fine in 2002to settle accusations, without admitting or denying wrongdoing.

Goldman has worked at several other tech companies that havebeen acquired, including Sybase, which was bought by SAP AG; @HomeNetwork, purchased by Excite; and VLSI Technology, bought by RoyalPhilips Electronics NV.

Before luring Goldman from Fortinet, Mayer brought inentrepreneur and former American Eagle Outfitters Inc. executiveKathy Savitt last month as chief marketing officer.

Mayer plans to discuss her turnaround strategy on a call withanalysts next month, Anne Espiritu, a spokeswoman for Yahoo, saidin an e-mailed statement yesterday.

“We will have more to share about our approach to buildingYahoo's future at our next earning's call, which is in mid-October,” Espiritu wrote.

Yahoo fell 2 percent to $15.68 at the close in New Yorkyesterday. The shares have dropped 2.8 percent this year, comparedwith the Nasdaq Composite Index's 20 percent gain.

An article in the New York Times argues that Goldman'sappointment suggests Yahoo is preparing for acquisitions, andReuters reports Goldman could earn up to $18 million over thenext four years.

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