Yahoo named Scott Thompson as its new CEO.
NEW YORK (CNNMoney) -- After four leaderless months, Yahoo named Scott Thompson as its new CEO on Wednesday -- choosing an outsider to take over the helm despite shareholders' calls to sell the company.
Thompson was previously the president of PayPal, an eBay (EBAY, Fortune 500) subsidiary. His appointment, which becomes official January 9, follows the ouster of former CEO Carol Bartz -- who was unceremoniously fired by the company's board via phone in September.
Shares of Yahoo (YHOO, Fortune 500) closed 3.1% lower Wednesday.
In a prepared statement, Thompson called Yahoo "an industry icon" with a "rich history." Although that's true, Yahoo has struggled mightily in recent years. The company gave up on search two years ago, a market that it once led. It is also losing ground with its other cash cow, display advertising, to new entrants to the market such as Google (GOOG, Fortune 500) and Facebook.
On a conference call following the announcement, journalists and analysts hammered Thompson on those points. He said he needs time on the job to develop strong answers.
"It's too early for me to have any informed opinion as to the display space, what's going on there and what's happening next," Thompson said on the call. "I have a lot to learn, and it's still very early days ... but down in that data we're going to find ways to innovate and compete."
Roy Bostock, chairman of Yahoo's board of directors, was also on the call and jumped in to answer many of the hardball questions.
"What we're doing at Yahoo, you can call it a turnaround, but it's really building on strong assets," Bostock said.
Will Yahoo sell itself? Despite Bostock's insistence Yahoo can stand alone, the company's weakness has attracted buyout interest from a long list of both private equity firms and tech titans. Reports in late October said Google was preparing a bid, in addition to Microsoft (MSFT, Fortune 500), which offered to buy Yahoo for more than $47 billion in 2008 and was turned down. Reports last month said Chinese Internet company Alibaba, of which Yahoo owns a stake, is preparing a takeover bid.
Yahoo co-founder Jerry Yang and other board members have privately told four major private equity firms that the board would not support a takeover offer for the entire company, Fortune reported on Wednesday.
Several groups of activist shareholders had pushed Yahoo's board to sell the company, but bringing in an outside CEO makes that possibility more remote.
An analyst on the conference call asked Thompson whether he "see[s] Yahoo as public or private" in the future.
Thompson got out half a word before Bostock jumped in: "We are a public company, with roughly a $20 billion market cap. We don't see that changing right now."
But earlier in the call, Bostock said Yahoo is "considering a wide range of business investments" and other options. He stressed several times during the call that "the primary focus will be on core business."
That leaves Yahoo room to shed more of its vast product portfolio. It began winnowing in late 2010, killing off struggling services like its Buzz community news site and aging AltaVista search engine. Yahoo also thinned its blogs and sold off bookmarking service Delicious.
Thompson said his aim is "to return this business to one of the great iconic brands. I have a core belief that what happens in the next five years, and the next ten, is almost impossible to imagine."
He closed the call by saying, "I'm genuinely excited to be here. I would not be here if I didn't think the future of this brand could be spectacular."
Yahoo chief financial officer Tim Morse had been serving as interim CEO, and he will return to his former position once Thompson takes the helm. Morse will also join the company's board. 
