Yahoo's Coup: Marissa Mayer Now CEOYahoo's Coup: Marissa Mayer Now CEO

After years of lackluster financial performance and a recent executive resume-padding scandal, Yahoo has turned to the company that was once its greatest rival for its next leader.

Yahoo said Monday it has appointed former Google VP of location and local services Marissa Mayer as its new CEO.

"I am honored and delighted to lead Yahoo, one of the Internet's premier destinations for more than 700 million users," said Mayer in a statement. "I look forward to working with the company's dedicated employees to bring innovative products, content, and personalized experiences to users and advertisers all around the world."

Yahoo co-founder David Filo praised Mayer as "a visionary leader in user experience and product design and one of Silicon Valley's most exciting strategists in technology development."

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Outside the company, there was more praise. Sameet Sinha, a senior analyst with investment bank B. Riley & Co., said in a phone interview that Mayer's appointment was "a great coup for Yahoo." Mayer's strong education and extensive experience at Google, fixing problem areas and dealing with online advertising, he said, will certainly benefit Yahoo.

A Silicon Valley executive familiar with Mayer's work who asked not to be named said, "She's obviously crazy-smart and talented. When I look at Yahoo and the situation the company is in, it's hard to imagine a better hire."

Mayer, 37, joined Google as its 20th employee in 1999, becoming the company's first female engineer. As a female CEO, her peer group includes IBM's Virginia Rometty, HP's Meg Whitman, and Xerox's Ursula Burns.

Among the 2012 Fortune 500 companies, there are just 18 female chief executives and only one company in 10 of that group has a woman on its board of directors. (Mayer became the fourth woman on Wal-Mart's board in April.)

Yahoo has had a female CEO before: Carol Bartz served in the position from January 2009 through September 2011, before being fired by Yahoo's board of directors for failing to turn the company around. Her successor, Scott Thompson, resigned in May after discrepancies in his resume were revealed.

Mayer has the experience and talent to fix Yahoo, to make it once again an innovative technology company rather than just another media business. From her years at Google, she knows how to design consumer products and she knows about online advertising.

Yahoo lost its way when it became a media company, thanks largely to the decisions of Terry Semel, CEO of Yahoo from 2001 through 2007. Semel, a show business veteran, tried to remake Yahoo in the image of Hollywood, even as Google was proving it was better to own a platform for content distribution than to own content or a website where people go to consume content. He had a chance to buy Google, to buy Facebook, and to sell to Microsoft--and missed all three. Bartz's surrender of Yahoo's search business to Microsoft didn't help.

As an executive with an engineering background, Mayer has the chance to make Yahoo relevant again as a technology company.

Yahoo has almost as many users at Facebook. It has some strong if neglected properties, like Flickr and Yahoo Mail, but it lacks a coherent vision and has not yet made its mark in the mobile market. Yahoo needs to make itself appealing not only to consumers but to developers.

Even if Mayer does not attempt to get Yahoo back into the platform game with Amazon, Apple, Facebook, Google, and Microsoft, her leadership should help the company develop and deploy online consumer products that people care about and use.

Her first step should be to make Yahoo Mail more secure by adding support for HTTPS connections. Next, she should buy video streaming service Hulu and consider a search deal with Mozilla. Then she should acquire Pinterest (if Yahoo can afford it and Google doesn't get there first), renovate Flickr, and integrate everything within a more appealing design. With any luck, she'll terminate the exclamation point that Yahoo insists on appending to its name, to the chagrin of writers everywhere.

Yahoo has a chance to rise again, and Mayer is just the woman to make that happen.