Edward Horowitz, an executive vice president and head of Citigroup Inc.'s Internet project development group, will leave the company "to pursue career options," according to a company memo.

His departure, coming after a string of high-profile executive changes at Citi, signals Sanford I. Weill's increasing influence on the direction of the banking company as sole chairman and chief executive officer.

Management of the e-Citi unit will be divided between Deryck Maughan, a vice chairman who will be chairman and chief executive officer, and Katherine McG. Sullivan, a lawyer for the company who will become chief operating officer.

The changes were not entirely surprising. Since the departure in April of co-CEO John S. Reed, Citigroup has been refocusing its Internet priorities. Indeed, Mr. Weill began to redirect much of Mr. Horowitz's responsibilities to an operating group headed by Mr. Maughan.

The group is made up of senior representatives from every Citigroup business unit, including e-Citi. Its aim is to coordinate and promote all Internet activities across global businesses rather than have those projects sprout from one division. This decentralized approach contrasts sharply with that of Mr. Reed, who was the driving force behind the formation of e-Citi.

"Ed was hired by John Reed and reported directly to John Reed," and the structure of e-Citi was "Reed's creation," said David Berry, director of research at Keefe, Bruyette & Woods. With Mr. Reed's departure, Mr. Horowitz "lost his primary sponsor."

Inside the company, the concern was that e-Citi operated in a sort of ivory tower, remote from the needs and objectives of the banking company's primary business units, Mr. Berry added.

Two appointments in May seem to have confirmed Mr. Weill's intentions to free Internet innovation from the confines of e-Citi. Robert Willumstad, head of consumer lending, was appointed to head a new division, e-Consumer. Jorge Bermudez, executive vice president and head of global cash management and trade services, was appointed head of the corporate counterpart, e-Business.

Meanwhile, it was Mr. Maughan who met with the press last month to discuss Citigroup's alliances with America Online and Yodlee Inc.

Mr. Weill's reorganization of Internet activities under Mr. Maughan "gets these initiatives closer into the business units," Mr. Berry said. Citigroup has done "a lot in terms of e-delivery but it is not as far out in front as I guessed it might have been considering that its former CEO had the vision," he said.

Two-year-old e-Citi has little to show for its endeavors. Despite early alliances with Netscape Communication's Netcenter portal site, a marketing agreement with the Virgin Group in the United Kingdom, and a stake with Microsoft Corp. and First Data Corp. in Transpoint, the stand-alone unit has continued to lose money. Earlier this year e-Citi posted a net loss of $93 million, compared with a loss of $35 million the year earlier.

The decentralized structure being put in place at Citigroup seems to mirror the approaches that some other banks have been taking. Chase Manhattan Corp. and J.P. Morgan & Co., among others, have Internet units that work with individual businesses throughout the companies to develop ideas and market them.

Wells Fargo & Co. created an Internet services group that put three high-ranking business line executives in charge of spearheading Internet initiatives for their units. "Most banks are moving toward integration," said Diane Glossman, head of bank research at UBS Warburg. "Citi had been going in that direction as well," she said.

Steven J. Ollenburg, president of the Internet-only Principal Bank, said that "a lot of banks have a difficult time reconciling their existing distribution channels with Web distribution. Reconciling the two is a tremendous challenge and one that is often overlooked."

Mr. Horowitz has agreed to work with Citigroup as a consultant through a transition period to advise senior management on the bank's electronic strategies, according to the memo, which was signed by Mr. Weill.

Ms. Sullivan is general counsel and chief of staff for Citigroup's global Internet operations. Before joining the Internet Group, she was Citi's general counsel of corporate law; before that she was general counsel for the global consumer business.

Mr. Horowitz joined Citibank in January 1997 from Viacom Inc. to head what was then called the advanced development group. During his time at the $688 billion-asset bank he created the e-Citi division and launched Citi f/I, its Internet-only bank that began to fold last month.

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