SAN FRANCISCO/NEW YORK - Yahoo has picked Google's Marissa Mayer to become its new CEO, turning to an engineer with established Silicon Valley credentials to rescue the struggling former internet powerhouse.

Ms Mayer, 37, edged out front-runner and acting CEO Ross Levinsohn to become Yahoo's third CEO in a year. She hopes to stem losses to Google and Facebook - which her high-profile predecessors failed to do.

Her hiring signals the internet company is likely to renew its focus on web technology and products rather than beefing up online content.

Ms Mayer, Google's 20th employee and first female engineer, has led a number of its businesses and was credited for envisioning the clean, simple Google search interface still in use today, a major selling point for web surfers.

Also known for her love of fashion and a regular on the society pages, she joins the extremely thin ranks of female Silicon Valley CEOs and said she was immediately interested when Yahoo's board reached out to her in mid-June.

"This is a very competitive and a tough space. I don't think that success is by any means guaranteed," she said. "My focus is always end-users, great technology and terrific talent."

Shares of Yahoo, worth less than half their value during its dotcom heyday, gained 2% to $15,97 in after-hours trading.

"It's a statement on Yahoo's part to go with a product-centric CEO choice. It's a very big commitment on the board's part to pursue a product-centric strategy," venture capitalist Marc Andreessen told the Fortune industry conference in Aspen, Colorado.

Tech companies can be turned around, he said, citing as an example Apple, which had teetered on the brink of bankruptcy before Steve Jobs returned to the company he co-founded.

Ms Mayer was to start on Tuesday, when the company was scheduled to report its quarterly financial results, but would not join the post-release conference call.

She also revealed on Twitter that she is pregnant with her first child, a boy. She told Fortune magazine that the baby was due on October 7 and she expected her maternity leave would be only a few weeks long.

A YEAR OF TURMOIL

But Ms Mayer's ascension comes as her profile at Google appeared to have diminished in recent months. Shortly after Larry Page took over the helm from Eric Schmidt, she was excluded from a group of top executives reporting directly to the CEO and granted oversight over major strategic decisions.

Mr Schmidt, now executive chairman at Google, said hiring Ms Mayer was a "real win" for Yahoo but dismissed the notion that she left because she was marginalised at Google.

"I promoted her through the ranks and she is now running this sort of big maps business, which is a lot of money," Mr Schmidt said on the sidelines of the Fortune conference, adding: "It's a nice big step for her. It's a loss for Google."

Her appointment caps a tumultuous year at Yahoo. In May, Scott Thompson resigned as CEO after less than six months on the job as controversy flared up over his academic credentials. Mr Thompson had replaced the controversial and occasionally foul-mouthed Carol Bartz, fired in September after failing to revitalise Yahoo.

Yahoo had been widely expected to go with Mr Levinsohn, who in his few months at the helm tried to push a strategy of forging media partnerships to beef up the company's online content.

Ms Mayer said Yahoo could excel as both a media and a tech company: "There's a very uninteresting debate happening around Yahoo between technology and media, and it doesn't really make sense to me because if you look at most major technology companies, media is a big part of their business."

She said it was too soon to talk about restructuring, but was "sensitive to the fact that there has been a lot of change recently at Yahoo, so I don't want to make unnecessary changes".

Still, observers are keen to see whether Ms Mayer keeps an executive team that includes Mickie Rosen and Michael Barrett - two former News Corp executives installed by Mr Levinsohn just months ago - and, of course, Mr Levinsohn himself.

Reuters