The headquarters of Yahoo Inc in Sunnyvale.
The headquarters of Yahoo Inc in Sunnyvale. Reuters

The president of online payment company Paypal, Scott Thompson, has been confirmed as the new CEO of Yahoo.

Thompson will replace Carol Bartz, who was dismissed in September in response to the company failing to keep up with its biggest rivals such as Google and Facebook.

The web portal is undergoing a strategic review after seeing a decline in its web search and email services. Chief financial officer Tim Morse has been serving as the interim CEO.

Thompson received the Ernst & Young entrepreneur of the year award in 2011. He worked as the chief technology officer at Paypal from 2005 before stepping up to vice-president in 2006 and becoming president in 2008.

He has previously worked at Visa subsidiary Inovant and at Barclays Global Investors.

"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," declared a statement by Yahoo board chairman Roy Bostock.