Yahoo! has confirmed the appointment of former Google executive Marissa Mayer to become chief executive of the ailing company.
Mayer's hiring, a surprise pick for the search rival's third CEO in a year, saw her edge out front-runner and acting CEO Ross Levinsohn.
Yahoo! share rose two percent to $US15.97 in after-hours trading.
The company said Mayer would assume her role on Tuesday, when the company is scheduled to report its quarterly financial results.
Mayer, one of Google's earliest employees, was the Internet search company's first female engineer and has led various businesses at Google including the design of its flagship search engine and its location and local services business.
Yahoo! had been widely expected to go with Levinsohn, who in his few months at the helm tried to push a strategy of forging media partnerships to beef up the company's online content.
A source close to the situation said that Mayer, who is recognized in Silicon Valley as more focused on technology than content, will try to get Levinsohn to stay with the company.
Mayer's appointment caps a tumultuous year at Yahoo!. In May Scott Thompson resigned as chief executive after less than six months on the job after a controversy over his academic credentials.
Thompson had replaced controversial Carol Bartz, who was fired in September after failing to revitalize Yahoo!.
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