The decision to lure Bartz, 60, away from software maker Autodesk Inc ends Yahoo's two-month search to replace co-founder Jerry Yang, who surrendered the CEO reins after potentially lucrative deals with rivals Microsoft Corp and Google Inc both collapsed.

Bartz's appointment could set the stage for Microsoft to renew its efforts to buy Yahoo's Internet search operations as a way of mounting a more serious threat to Google, the market leader. Microsoft had been reluctant to deal with Yang because he rebuffed several previous overtures, including a USD 47.5 billion offer to buy Yahoo in its entirety last May.

Microsoft subsequently withdrew that bid, valued at USD 33 per share, and now Yahoo's stock price hovers around USD 12. Yang had hoped to placate shareholders by using Google's superior technology to sell some of the ads alongside Yahoo's search results, but that idea unraveled in November after federal antitrust regulators threatened to block the deal.

Bartz "is the exact combination of seasoned technology executive and savvy leader that the board was looking for," said Yahoo Chairman Roy Bostock.