Yahoo! has named Marissa Mayer, a key Google team member, as its new chief executive.
The new position puts her among the most prominent women in technology and corporate America.
Yahoo! said in a statement that the appointment "signals a renewed focus on product innovation to drive user experience and advertising revenue for one of the world's largest consumer Internet brands".
Ms Mayer edged out the favourite and acting CEO Ross Levinsohn.
Shares in Yahoo, less than half their value during its dotcom heyday, gained 2% to $15.97 in after-hours trading.
Ms Mayer will assume her role immediately and the company is scheduled to report its quarterly financial results later.
On Monday she tweeted that she was "incredibly excited" to be embarking on her new role.
She is 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.
She most recently was responsible for Google's local and location services.
Ms Mayer's appointment caps a difficult year at Yahoo!
In May Scott Thompson resigned as CEO after less than six months on the job after a controversy over his academic credentials.
Mr Thompson had replaced controversial Carol Bartz, who was fired in September after failing to revitalise the firm.