Yahoo announced its new chief executive today, naming PayPal President Scott Thompson to become its new leader and a board member starting on Monday.

"Scott brings to Yahoo a proven record of building on a solid foundation of existing assets and resources to reignite innovation and drive growth, precisely the formula we need at Yahoo," Chairman Roy Bostock said in a statement today, capping off a four-month search.

Thompson said in a statement that he wants to "deliver Yahoo's next era of success" by dealing with both Yahoo advertisers and users. The statement continues:

Yahoo has a rich history and a solid foundation to build on, and its continued user engagement is one of the many reasons for my enthusiasm. With the ultimate goal of delivering the value our shareholders expect, my immediate focus will be on getting to know the entire team and hearing more from all Yahoos, working closely with the engineers and product teams, and diving deeply into our products and services to learn more about what our more than 700 million users find most engaging and useful. I will also be working directly with our region leaders and sales teams globally to get a clearer understanding of the needs of our advertisers and publishers. Clearly, speed is important, but we will attack both the opportunity ahead and the competitive challenges with an appropriate balance of urgency and thoughtfulness.

Initial investor reaction to the announcement was chilly. Shares of Yahoo were down around 2 percent to start the trading day.

Thompson will also have the job of rebuilding Yahoo--potentially with some of its parts sold off. Thompson "will work closely with the board as we continue the strategic review process to identify the best approaches for the company and its shareholders. As part of this process, Yahoo is considering a wide range of opportunities for the company's business, as well as specific investments or dispositions of assets," Bostock said.

All Things Digital's Kara Swisher first reported the news last night, pointing out that Thompson recently "liked" Yahoo on his Facebook page.

The Internet pioneer has been searching for a new CEO and future direction since Yahoo's board fired Carol Bartz last September. Bartz called the board "doofuses" afterward but also took home about $10 million in severance pay.

Thompson previously served as senior vice president and chief technology officer at PayPal, eBay's online payment service. Before that, he was the executive vice president who ran technology development at Visa's Inovant subsidiary, which handled technology matters for the credit card company. Before that, he was chief information officer of Barclays Global Investors.

Yahoo brought Bartz on to try to restore the company's fortunes, but so far, that's not come to pass. Search rival Google surpassed Yahoo, while Facebook has become the online hub of activity for many people who once might have started their browsers at Yahoo.

Yahoo is exploring various sales options, with interested parties including Chinese Internet company Alibaba Group and, reportedly, private investment groups Silver Lake and TPG Capital.

Tim Morse has been Yahoo's acting CEO since Bartz was fired. He'll resume his job as chief financial officer when Thompson arrives, and he has also been named to Yahoo's board of directors, Yahoo said.

See also: ZDNet: Yahoo's new CEO Thompson--five big challenges

Updated 6:16 a.m. PT and 6:26 a.m. with confirmation that Thompson is the new CEO and with further details.