Yahoo has appointed leading Google executive Marissa Mayer as chief executive officer, ending months of speculation.
The surprise move comes just over a week after interim Yahoo CEO Ross Levinsohn helped end a patent battle with Facebook with an advertising partnership deal.
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The initiative was widely expected to win Ross Levinsohn a permanent appointment as CEO, particularly after the withdrawal of rival Jason Kilar, head of the Hulu video streaming service.
But Yahoo's board opted for Marissa Mayer, one of Google's top executives and the first woman to be appointed as an engineer at the firm. Her appointment was kept a closely-guarded secret.
Mayer will begin work at Yahoo immediately. "I'm incredibly excited to start my new role at Yahoo tomorrow," she tweeted following the announcement.
Levinsohn was appointed interim CEO in May after Yahoo CEO Scott Thompson resigned over inaccuracies discovered in his corporate biography.
Thompson's departure came just four months after taking over as chief executive from Tim Morse, who had held the role on an interim basis after Yahoo's board removed Carol Bartz as chief executive in September 2011, after only two and a half years.
Yahoo has been in a state of nearly constant turmoil since it rejected Microsoft's $44bn takeover offer in 2008. It is looking to re-establish itself as a leader in digital advertising in the face of strong competition from newcomers Facebook and Twitter.
Yahoo said Mayer's appointment signaled a renewed focus on product innovation to drive user experience and advertising revenue.
Marissa Mayer said: "I am honoured and delighted to lead Yahoo, one of the internet's premier destinations for more than 700 million users."
She brings a wealth of experience from Google, where she had been responsible for many of the company's key products, including its search homepage, Gmail and Google News.
More recently, Mayer had taken on responsibility for location and local services, including Google Maps.
Yahoo co-founder David Filo said: "Marissa is a well-known, visionary leader in user experience and product design and one of Silicon Valley's most exciting strategists in technology development.
"I look forward to working with her to enhance Yahoo's product offerings."
Mayer currently serves on the boards of Walmart, San Francisco Museum of Modern Art, San Francisco Ballet and New York City Ballet. She will also join Yahoo's board.