The New York Times got the scoop of the year today when it announced that Yahoo has hired Google’s Vice President of Location and Local Services, Marissa Mayer as its next CEO, replacing Ross Levinsohn who took over as interim chief following the removal of Scott Thompson in May. Mayer, who had been the public face of Google outside of the top three power players, becomes Yahoo’s third CEO in less than a year, and the fifth in five years.

The appointment caught everybody by surprise as Ross Levinsohn had been strongly considered as the next CEO of Yahoo following the two month search. The former News Corp executive and head of Yahoo’s global media had made two crucial deals that had everybody thinking he was set to retain his position permanently at Yahoo.

He swiftly mended the relationship with Facebook after Thompson nearly severed it by launching a patent litigation against the social network company, and he also closed the deal in selling part of Yahoo’s stake in Chinese ecommerce giant, Alibaba.

Mayer had been with Google since 1999, joining the company in its inception as the 20th employee. She was passed over for promotion when Larry Page took over as CEO of Google from Eric Schmidt and reorganized the company in early 2011.

Mayer, who had been the lead in search at Google was given the job to improve Google’s location efforts while another executive, Jeff Huber, was promoted to senior VP of local ahead of Mayer, which made him her boss. Many were dismayed by Page’s decision and wondered whether Mayer’s days at Google were coming to a close.

In a statement, Mayer said, “I am honored and delighted to lead Yahoo!, one of the internet’s premier destinations for more than 700 million users.”

The appointment had excited Silicon Valley as it meant that Yahoo may have finally figured out what it wants to do and what it needs to become. Mayer’s background in programming and computer science is a departure from recent chiefs who have had primarily marketing and media experiences.

Under Terry Semel, a former Warner Brothers executive, Yahoo shifted from being a technology company to a media company. Indeed, its tagline these days is “the premiere media company”. Co-founder and former CEO Jerry Yang tried to steer the company back to its roots but failed, as did Carol Bartz.

Mayer’s job at Yahoo won’t be easy. The company had seen itself sidestepped in terms of technological innovations. Ever since the Internet became a powerhouse industry, Yahoo had missed the boat almost entirely.

Yahoo’s strongest assets are its finance and sports coverage in addition to email and messenger. The company essentially gave up on search by handing it to Microsoft whose Bing now powers Yahoo Search. Mayer told the New York Times that she sees the search partnership as positive. She also wants to see more done with video and mobile.

Yahoo’s acquisition of Flickr left the photo-sharing startup stagnant, losing the mantle of the Internet’s photo album to Facebook and allowed Instagram to be the king of mobile photo sharing. It tried to compete with Tumblr by launching a knockoff service called Yahoo Meme in 2009, which was shut down a few months ago.

Its acquisition of Delicious nearly led to the shutting down of the bookmarking service before the rest of the Internet found out and demanded a stay of execution. Yahoo eventually sold Delicious to the co-founders of YouTube in 2011.

It had acquired many promising startups over the years, only to shut them down or sell them off, failing to integrate the technologies into Yahoo’s media properties. Its recent round of layoffs cost Koprol a chance to reinvent itself as the entire engineering division in Indonesia was laid off in April.

Under Scott Thompson’s reorganization, Yahoo had lost its head of product, Blake Irving who left shortly ahead of the mass layoffs in April, obviously knowing full well that Thompson had planned to dissolve his division. Mayer’s appointment clearly is a strong reversal of that decision.

By recruiting Mayer, Yahoo may have made itself respectable again. Her profile and credentials should be strong enough to entice people to come and work for the fading Internet giant, and her skills in product development is exactly what Yahoo needed. Her appointment, “signals a renewed focus on product innovation” according to Yahoo’s press release.

Yahoo co-founder David Filo said, “Marissa is a well-known, visionary leader in user experience and product design and one of Silicon Valley’s most exciting strategists in technology development.”

Filo’s sentiments were echoed by Yahoo chairman Fred Amoroso. He said, “The Board of Directors unanimously agreed that Marissa’s unparalleled track record in technology, design, and product execution makes her the right leader for Yahoo! at this time of enormous opportunity”

As to why AllThingsD’s Kara Swisher who have always had the scoop on Yahoo did not break the new about the appointment? According to Nicholas Carlson at Business Insider, Yahoo’s board found out who at Yahoo management has been leaking the news to her and moved to place a cone of silence over the source.

Mayer joins a club of former Google senior executives holding top positions in Silicon Valley which includes Tim Armstrong as the head of AOL and Sheryl Sandberg as the COO at Facebook.