Yahoo (NASDAQ:YHOO) named PayPal President Scott Thompson its new chief executive Wednesday morning, replacing former CEO Carol Bartz, who was fired in September.
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Thompson is replacing interim leader Tim Morse, who will resume his role as chief financial officer. The move is a part of Yahoo’s ongoing strategic review as it struggles to compete against web majors Google (NASDAQ:GOOG) and Facebook, among others.
The new CEO, whose chief role and appointment to the Yahoo board will become effective on January 9, has headed the online payments units of eBay (NASDAQ:EBAY), PayPal, since early 2008 and was previously its chief technology officer.
Under his watch, PayPal solidified its lead as the global online payment service, expanding its customer base to more than 104 million from 50 million and growing revenue to $4 billion from $1.8 billion. In the third quarter of 2011, the company processed $29 billion in payments.
“Scott brings to Yahoo a proven record of building on a solid foundation of existing assets and resources to reignite innovation and drive growth, precisely the formula we need at Yahoo,” said Roy Bostock, the company’s chairman.
Bostock will be looking to Thompson to restore the “energy, focus, and momentum necessary to grow” the company’s core business and return the once-dominant search engine and media firm to a “path of robust growth and industry-leading innovation.”
The chairman says Yahoo intends to remain a public company and has no plans to go private, according to Dow Jones. The new CEO appointment won't slow the strategic review, he said.
Thompson says he will work directly with region leaders and sales teams globally to get a clearer understanding of the needs of advertisers and publishers as part of the ongoing strategic review. He noted that transferrable skills from PayPal to Yahoo are knowing how to balance merchant and customer needs while creating value for the two parties.
Yahoo, whose services include email, search and news, was a web pioneer that enjoyed rapid growth throughout the 1990s. Recently, however, it has struggled to keep up with rivals in the face of dwindling advertising revenue.
The company rejected a $44 billion bid in 2008 from Microsoft (NASDAQ:MSFT), which hammered its stock price and caused its co-founder, Jerry Yang, to step down later that year. Bartz was let go in September after failing to fix the company’s fortunes despite more than two years on the job.
Shares of Yahoo were down more than 1% shortly after the announcement; perhaps a sign that investors question whether Thompson was the right choice for the job. Shares of eBay, meanwhile, shed 4%.