Yahoo names PayPal exec Scott Thompson as CEO

— -- Internet pioneer Yahoo on Wednesday named Scott Thompson its next CEO in an effort to reverse the flagging fortunes of its online ad business, which has been battered by rivals Google and Facebook.

Thompson, 54, president of eBay's PayPal electronic-payments unit, replaces interim CEO Tim Morse on Monday, four months after former CEO Carol Bartz was shown the door. Morse will return to his role as CFO.

"Scott has an impressive track record as a business leader taking existing online businesses and building them up — delivering growth and increased value in the process," Yahoo Chairman Roy Bostock said on a conference call.

Thompson will have his work cut out for him. Yahoo's CEO slot has been a revolving door. Bartz lasted in the position 2½ years but got the boot after showing little progress. Bartz tried to cut costs, including with layoffs, but that did little to improve Yahoo's situation.

"There is going to be an energy (at Yahoo) that you have not seen in a while," Thompson said in an interview. "In a relatively short period of time, we will have an idea of where we need to go."

In recent months, Yahoo has reportedly explored a number of strategic options, including a possible sale of all or part of the company. Thompson's selection means an acquisition is likely off for now, Bostock indicated, but Yahoo is still open to selling off investments in Alibaba Group and Yahoo Japan. Yahoo held 42% of Alibaba Group and 35% of Yahoo Japan as of Sept. 30.

Yahoo's stature in the online advertising market continues to slide as Facebook and Google make advances. The U.S. online ad market increased 20.2% to $31.3 billion in 2011, yet Yahoo's share of online ad revenue slipped to 11% last year from 13.3% in 2010, says researcher eMarketer.

Facebook's share of display ads grew to 16.3% in 2011 from 12.2% in 2010, overtaking Yahoo for the No. 1 spot. Google has extended its dominance in U.S. search ad revenue, hitting 75.9% last year, up from 73.6% in 2010.

Analysts say Yahoo has an identity crisis. "They don't know if they're a market research company, a data company, a media company or a technology company," says Forrester Research's Shar VanBoskirk.