Yahoo CEO: 'This company is doing just fine'

Although Icahn isn't breathing down his neck for now, Yang probably won't have much more longer to deliver on his turnaround promises, said James Post, a Boston University professor specializing in corporate governance and business ethics.

"I think he is going to have to take some major strategic action before the end of the year," Post said. "The support Jerry has now seems much more fragile than he has had in the past."

Yahoo shareholders will have a chance to confront Yang Aug. 1 at the company's annual meeting.

Even though Icahn has backed off, some shareholders are still expected to oppose the re-election of Yahoo's current directors to punctuate their dismay with company's struggles.

A major shareholder advisory firm, Glass Lewis & Co., added fuel to the fire late Tuesday by recommending votes against three Yahoo directors — Chairman Roy Bostock, Ronald Burkle and Arthur Kern. More than 30 percent of Yahoo shareholders opposed that trio's re-election last year.

Glass Lewis backed Yang's re-election.

An even bigger major advisory firm, RiskMetrics, is expected to make its recommendations to shareholders Wednesday.

Yang, 39, said he doesn't feel enough time has elapsed for shareholders to assess his management skills because nearly half his tenure has been consumed by the on-again, off-again negotiations with Microsoft.

"I am as excited as I have ever been to lead this company," said Yang, who started Yahoo 14 years ago at Stanford University. "We have a sense of urgency to create value. Our stockholders and board will hold us to that."

Although he had been trading public barbs with Icahn before the cease-fire, Yang said he thinks the billionaire will be a valuable addition to the board.

Icahn "is a very smart guy on how to create value and that is a positive," Yang said.

In his public statements, Icahn has indicated he still believes a sale of all or part of Yahoo is the best way to boost the company's stock. Icahn has a strong incentive to increase the stock price because he paid about $25 per share for his 5 percent stake in the company.

Yang, who owns a 3.9 percent stake in Yahoo, remains interested in any deal — including a sale of the entire company to Microsoft — that recognizes the value of Yahoo's franchise.

As of Tuesday, Yahoo's market value was about $18 billion below the $47.5 billion Microsoft CEO Steve Ballmer offered in early May. Ballmer withdrew the $33-per-share bid after Yang sought $37 a share, or more than $52 billion.

Yang believes he can dramatically accelerate Yahoo's revenue growth during the next two years by extending the reach of its own online marketing network and drawing upon Google's superior technology to sell some ads on Yahoo's Web site.

If the proposed partnership isn't blocked by antitrust regulators, Yahoo hopes to start displaying some Google-generated ads in September. Management estimates the Google deal will boost Yahoo's annual revenue by $800 million.

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