Aug. 1 (Bloomberg) -- Yahoo! Inc. Chief Executive Officer Jerry Yang faces shareholders at his first annual meeting today with little progress to report after he spent half of his tenure fighting to retain control of the Internet company.

Since Yang took over in June 2007, the stock is down 29 percent. The company has lost market share in Internet searches in the U.S., dropping to 20.9 percent in a business it pioneered. Analysts estimate net sales growth will slow to 10 percent this year, the fifth straight annual decline.

The 39-year-old CEO upset some investors after he spurned takeover offers from Microsoft Corp. and forged a truce with billionaire Carl Icahn, who sought to oust Yang and the board. While Yang, who co-founded the company in 1995, says a turnaround is under way, some shareholders say they aren't convinced and anticipate renewed pressure for Yang to step down.

``Jerry Yang's emotional commitment to the company overrode his fiduciary duty to shareholders,'' said Mark Nelson, a partner at Mithras Capital in St. Helena, California. ``These guys are drinking their own Kool-Aid. They don't understand why Yahoo shareholders are upset.''

Nelson, whose firm owns 1.7 million Yahoo shares, said he withheld votes from Yang and eight other board members who are up for re-election. It's a symbolic gesture, because Icahn withdrew plans for an alternate slate of directors after he and Yang reached a truce. Under their agreement, Icahn, 72, and two of his candidates will join the board after the meeting.

`Hostile Crowd'

Yang will face a ``mostly hostile crowd'' at today's gathering, said Nelson, who doesn't plan to attend. ``The only thing that would satisfy me to hear him say is, `Look, we realize we made some mistakes here. There's a lot of value, and we're going to start on a new track.'''

Spokeswoman Diana Wong didn't return calls seeking comment. In a July 22 interview, Yang said Yahoo, owner of the No. 2 Web search engine after Google Inc., is making ``significant progress'' and that he intends to stay on as CEO.

Today's meeting starts at 10 a.m. local time at the Fairmont Hotel in San Jose, California, near the company's headquarters in Sunnyvale.

Under Yahoo's bylaws, a board member must receive a majority of votes to be elected. At last year's meeting, Yang, who wasn't yet CEO, was re-elected to the board with 94 percent of votes cast. Yang replaced Terry Semel as CEO less than a week after the meeting.

Gordon Crawford, a fund manager for Capital Research & Management Co., may withhold votes from Yang and Chairman Roy Bostock, the New York Post reported this week. Crawford, whose firm has at least 6.5 percent of the shares, didn't return a phone message.

Revival Plan

Yahoo has lost about $10 billion in market value since Yang became CEO. The company's share of the U.S. Web-search market has dropped 4 points from 25.1 percent, according to researcher ComScore Inc. in Reston, Virginia.

The shares fell 19 cents to $19.70 at 11:03 a.m. New York time on the Nasdaq Stock Market. Microsoft's offer sent Yahoo as high as $29.98 in February, and the software maker at one point bid $33 a share.

``Jerry's cost investors $20 billion by turning down'' the offer, Larry Haverty, an associate portfolio manager at Gamco Investors Inc. in Rye, New York, told Bloomberg Television. ``Six months from now, I think Jerry will be dancing with Microsoft again.'' His firm held Yahoo shares among its $28.7 billion in assets as of March.

Yang's revival plan calls for increased spending on technology that will help Yahoo lure more advertising to its site and Web pages of its partners. He predicts sales of $8.8 billion in 2010, a 72 percent increase from last year.

Winning Support

He could win investor support by announcing more aggressive moves such as firing workers and hiring contractors for some tasks, said Jeff Lindsay, an analyst at Sanford C. Bernstein & Co. in New York. A share buyback would also help, he said.

A sale or spinoff of Asian assets including stakes in Alibaba.com Corp. and Yahoo Japan Corp. would boost Yahoo's value, said Colin Gillis of Canaccord Adams Inc. in New York.

By early next year, Yang will have to show he's returning the company to profitable growth, or investors will push harder for his ouster, said Clay Moran, an analyst at Stanford Group Co. in Boca Raton, Florida.

That may be difficult if the economy continues to deteriorate, leading advertisers to cut budgets further, said Moran, who has a hold rating on the shares. Yang is on ``thinner ice'' every quarter, he said.

To contact the reporter on this story: Crayton Harrison in Dallas at tharrison5@bloomberg.net.

Last Updated: August 1, 2008 11:06 EDT