Yahoo chose its new CEO, Silicon Valley veteran Carol Bartz (view Carol’s resume at Chooses New CEO Yahoo lured Bartz, 60, from Autodesk Inc., which specializes in making design software for architects and engineers. Bartz was CEO from 1992 through 2006, when she became executive chairman. Autodesk is just about half the size of Yahoo, with approximately 7,000 employees worldwide.

Bartz is also on the board of directors for Cisco Systems Inc. with Jerry Yang and is also a member of the Intel Corp. board with Yahoo President Susan Decker, who also interviewed for the CEO position. In fact, Yahoo announced that Decker will resign after a transitional period. Wow, guess she’s angry.

Chairman Roy Bostock said Bartz “is the exact combination of seasoned technology executive and savvy leader that the board was looking for, and we are thrilled to have attracted such a world-class talent to Yahoo. She is admired in the Valley as well as on Wall Street for her deep management expertise, strong customer orientation, excellent people skills, and firm understanding of the challenges facing our industry.”

Bostock added that the board “thanks Sue (Decker) for her service as President, the important contributions she has made to Yahoo’s development in a variety of roles over the past 8 1/2 years, and her willingness to work with Carol Bartz to ensure a smooth transition. We respect her decision to move on to other challenges and wish her only the best.”

Bartz’s appointment already sparked renewed speculation of negotiations with Microsoft, who continues to proclaim they are very interested in Yahoo’s search division. Microsoft CEO Steve Ballmer, who tried and failed to buy Yahoo last year, publicly said in the past few weeks that a search deal with Yahoo should be made when there is a management transition at both companies. Microsoft late last year hired a former Yahoo search executive to lead its Internet business.

Microsoft is feverishly working to prevent Google from getting 100% of all online search queries. If Google continues to gain market share as they have in the past, it won’t be much longer until they are there! Recent data from HitWise indicates that Google has once again increased their market share in the month of December.

At this point, one must wonder if Microsoft or Yahoo has a shot at competing with Google, together or on their own. Of course, at one point, AOL basically controlled the entire online population, so things certainly do change, and fast.

Investors did not react much to this news yesterday, but many discouraged Yahoo investors have likely already thrown in the towel at this point. Yahoo announces earnings on January 27th, so we’ll see if they have anything to say about Microsoft by then. It will also be interesting to see how PPC advertising is weathering the economic storm.

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