Yahoo CEO Scott Thompson in an undated photo.
Yahoo is laying off 2,000 employees, just three months after Scott Thompson became CEO. Thompson is facing a proxy fight from a hedge fund for control of the company. Reuters/PayPal

Yahoo elected Scott Thompson, former president of PayPal, as its new CEO, four months after ousting Carol Bartz as CEO and hiring investment bankers for a turnaround.

Thompson, 53, an accountant who had run the eBay unit's online payments service since 2008, inherits the CEO job at the Sunnyvale, Calif.-based Yahoo at a time when its future is in doubt. Its directors last month considered selling the company as well as inviting in private equity investors to acquire a minority interest.

I want to restore Yahoo as an iconic brand, he told investors on a Wednesday call. The core business assets are stronger here at Yahoo than people believe at this point, he added.

Thompson said he is a huge Yahoo fan. I start on some Yahoo site in the morning, he said and use it all day. The new Yahoo CEO said he saw tremendous value in the company's sites and brands, perhaps echoing the comments of Daniel Loeb, the New York investor whose Third Point Capital acquired a 5.2 percent stake in the company and said it had not been managed for value.

Yahoo shares fell about 2.8 percent on the news, falling 44 cents to $15.84 after the new Yahoo CEO spoke to investors. They closed down 3 percent at $15.78.

Thompson becomes the latest in a string of outsiders brought in to manage iconic brand. After being co-founded by Stanford University computer science graduate students Jerry Yang and David Filo, the fledgling company hired Tim Koogle, an engineer from Intermec, as its CEO, who guided the company through its successful initial public offering in 1996. Later, Yang ran the company, as did Terry Semel, a former CEO of Time Warner, followed by Bartz.

Although he has an accounting background, Thompson has been active in information technology throughout his career, having been Visa's chief technology officer. At PayPal, he presided over an electronic payments line that handled $29 billion in the third quarter of 2011.

Thompson's election may send a signal to Yahoo's Chinese partner, Alibaba Group, that it is serious about selling its 44 percent stake in the online payments company. Alibaba Chairman Jack Ma has said he would like to acquire all of Yahoo. Yahoo Chairman Roy Bostock declined comment on that topic, noting the company has a team working on that. But he left the door open to Yahoo's divesting its Asian assets which also include a minority stake in Yahoo Japan.

Both Thompson and Bostock also said Yahoo will remain a public company. I do not envision us not being public as we go forward, said Bostock, a retired advertising executive who personally fired Bartz, 63, in a telephone call in September.

Thompson said he saw tremendous value in the search and media company that would be best preserved keeping it public but also adding new services, especially for the mobile sector. It's a really big question and a really big opportunity, bigger than what people imagine at this point.

Prior to eBay and PayPal, where Thompson boosted the number of online users above 100 million, the new Yahoo boss had been a top executive of Visa, the No. 1 credit card service. He was Executive VP of Visa's Innovant service. He was was a top information officer at Barclays Capital.

In the interim since Barz's September firing, Yahoo CFO Tim Morse had been acting CEO. He'll now return to that position, the company said.

Thompson has been a director of several technology companies including F5 Networks. He will formally take over at Yahoo Jan. 9