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New CEO Marissa Mayer is a huge hire for Yahoo

FORTUNE Most Powerful Women Dinner New York City

Jemal Countess/Getty Images for Time Inc.

Marissa Mayer speaks onstage at the FORTUNE Most Powerful Women Dinner New York City. The 37-year-old was named CEO of Yahoo today.

One thing's for sure about newly named Yahoo CEO Marissa Mayer: no one will question the Stanford computer science grad's credentials, as they ultimately did those of Mayer's predecessor, Scott Thompson, who had exaggerations in his resume that were revealed by activist Yahoo shareholder Dan Loeb earlier this year.

Mayer actually ups the ante on engineering cred: the 37-year-old was Google's first female engineer, as well as one of the first 20 employees hired (she was in fact number 20). She can't, however, repeat that achievement in the Yahoo C-suite: she follows Carol Bartz (ousted last September) as the second woman to hold the top job.

This move has taken the tech world by surprise ("shock" might be a better word). It was widely expected interim CEO Ross Levinsohn would get the nod, given that he seemed to have Loeb's support. In this respect, the naming of Mayer is earth-shattering, and it comes on the heels of rumors that she had been passed over for advancement at Google, even though she had been standing in for co-founders Larry Page and Sergey Brin at public events and in the media. Mayer ranks right alongside Facebook COO Sheryl Sandberg as powerful women in Silicon Valley go.

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Has Yahoo finally decided to give up on tech and become a media company?

stevelyon/Flickr/Creative Commons

Yahoo!'s Santa Monica location.

I think Yahoo is unique among current companies for several reasons. First, it's got a foot firmly planted in both Silicon Valley and Southern California — two places with business models that just can't seem to get along (SOPA? PIPA? Hollywood?). And it's been this way for a while, going back to the days when Terry Semel was CEO and Yahoo was looking a lot more like a media company than a tech company. (Yahoo also has an office in New York, which adds yet another wrinkle, as the Big Apple is the capital of media.)

Second, Yahoo still has a huge number of users, some 700 million, but it can't seem to grow its revenue. This has caused great turmoil at the company and no end of speculation about its future. But why does it have so many users? Because it's one of two big holdovers from the Web 1.0 era, before the dotcom crash. The other is AOL. (Microsoft and Amazon are a different story, by the way.) Both companies occupy a lot of Internet mindspace. But no one thinks they have the same potential as Facebook (which, interesting, Yahoo is now suing, and Facebook is suing back).

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