Updated from 5:19 p.m. EST
chief executive Carol Bartz as its CEO to replace co-founder Jerry Yang.
The move ends a two-month CEO search for the Internet giant. Investors, however, shrugged off the appointment, with Yahoo!'s stock closing Tuesday down about 1% to $12.10 after an initial report in
The Wall Street Journal
Yahoo! has been steadily losing business to
in the Internet search and advertising, and Bartz, who has a solid management record, signals Yahoo!'s interest in pushing forward in the search arena.
The executive search began after it became clear that Yang and
CEO Steve Ballmer were at odds in the merger discussions the two held last year.
Bartz "is the exact combination of seasoned technology executive and savvy leader that the board was looking for," said Yahoo! Chairman Roy Bostock.
Susan Decker, who also was a candidate for the CEO job and who has long been considered a potential leader for the company, informed Yahoo!'s board Tuesday that she will resign after a transitional period. Both Decker and Bartz are on
board of directors.
Bartz's track record indicates she will move quickly to build upon Yahoo!'s strengths while doing her best to shed the weaknesses. She spent nearly 17 years at Autodesk, which specializes in making design software for architects and engineers. She was the San Rafael, Calif.-based company as CEO from 1992 until 2006, when she stepped aside to become executive chairman.
While Bartz was CEO, Autodesk's annual revenue has ballooned from nearly $300 million to $1.5 billion.
Bartz spent nine years at
, where she eventually became the No. 2 executive behind the server maker's then-CEO Scott McNealy. She also has worked at
Despite Bartz's resume, she will likely face questions about whether she is a good fit at Yahoo! because she lacks any background in advertising -- the primary source of Yahoo!'s income.
Yahoo! also is far larger than Autodesk, with annual revenue of more than $7 billion and roughly 13,000 employees, nearly twice the size of Autodesk's work force.
If Yahoo! turns its search operations over to Microsoft, many analysts expect the company to lay off thousands of workers to save money. As it is, Yahoo! just dumped 1,500 workers to help shore up its profits during the recession. The company also has lost many top managers during the past two years.
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