SAN JOSE, CALIFORNIA (Bloomberg) - Yahoo! Inc.'s investors threw their weight behind the Internet company's board on Friday, with 85 percent of votes supporting CEO Jerry Yang after he fought off a proxy fight with Carl Icahn.

Each director received at least 77 percent of the votes cast, Sunnyvale, California-based Yahoo said on Friday after its annual meeting. Mr. Icahn was appointed to the board after the vote.

The result gives Mr. Yang a boost after he drew criticism for passing up a $47.5 billion takeover offer from Microsoft Corp. Mr. Yang, who co-founded the company in 1995 and took over as CEO last year, said yesterday that Yahoo's Internet advertising strategy is on the verge of paying off.

"Yahoo still has pressure to boost its stock," said Colin Gillis, an analyst at Canaccord Adams Inc. in New York. While Mr. Icahn did not get the power on the board that he originally sought, his presence "certainly breaks the status quo".

Chairman Roy Bostock received about 80 percent of the votes, Yahoo said. Director Arthur Kern received the lowest number, with 78 percent. About 153 million shares were withheld for Mr. Yang's re-election, Yahoo said.

The board will expand to 11 members from nine to make room for two of Mr. Icahn's nominees, part of an agreement announced last month to placate the investor. The directors will be named by August 15, Yahoo said.

Yahoo, owner of the second most used Internet search engine after Google Inc., fell nine cents to $19.80 on Friday in Nasdaq Stock Market trading. Microsoft's offer sent Yahoo as high as $29.98 in February, and the software maker at one point bid $33 a share.

"We are still in the middle of a massive transformation," said Mr. Yang, 39. "The Internet is still the only industry, really, that's growing in advertising revenue."

Chief financial officer Blake Jorgensen said Yahoo is seeing sales growth even amid the economic slowdown. Yahoo's balance sheet is "extremely healthy" and the company may buy back shares and make acquisitions in years to come, he said.

Mr. Bostock said on Friday that Microsoft never made its $33 a share offer in writing, calling it an "offhand comment" that was never communicated explicitly to the board. The software maker also did not talk about regulatory implications of the deal, he said. Yahoo and Microsoft have sparred over what happened during the negotiations.

"Yahoo is attempting to rewrite history yet again with statements that are not supported by the facts," Redmond, Washington-based Microsoft said on Friday in an e-mail.

Mr. Bostock said Yahoo is meeting its goals and credited executives with "one hell of a performance."

Some Yahoo shareholders applauded after Eric Jackson of Ironfire Capital LLC asked for Mr. Bostock to resign if investors withheld enough votes. Mr. Bostock said he will not step down.

More than 100 shareholders attended the meeting and appeared to be outnumbered by empty chairs.

"The event of the summer was a nonevent," said Canaccord's Gillis, who has a "hold" rating on the stock.