Taylor, currently chief executive of independent UK energy supplier BizzEnergy, will be tasked with supporting further growth and development of Efficient Frontier in Europe.
He worked at Yahoo! for five years until August 2007, as regional vice-president of Yahoo! Europe and managing director of Yahoo! Search for Europe.
His responsibilities encompassed search, communications (mail and messenger), media (news, sports, finance), commerce (Kelkoo), and social media (Flickr, Answers).
David White, general manager of Efficient Frontier Europe, said: "Given Stephen's experience, his passion for search, his valuable relationships and his detailed knowledge of the European market, he will be a great asset to Efficient Frontier."
Previously, Taylor was European managing director of Overture, which was acquired by Yahoo in 2003 for $1.7bn.
Taylor said: "I have seen Efficient Frontier go from strength to strength since it launched in the UK and Europe.
"From being practically unknown only two years ago, it is now a force to be reckoned with as it competes with the largest search engine marketing firms in the country. It is a really exciting time to join and I look forward to being part of Efficient Frontier's future success."