Yahoo! Inc.shareholders withheld a third of their votes to re-elect Chief Executive Officer Jerry Yang to the board, twice as many as reported earlier, a sign that pressure is mounting for him to turn the company around quickly.

Yang won re-election with 66 percent of the Aug. 1 shareholder vote, Yahoo said today in a statement. Broadridge Financial Solutions Inc., which tallied votes on behalf of its clients, misstated some results in the earlier tabulation.

The new results reflect wider disapproval for the board, which rejected a $47.5 billion Microsoft Corp. acquisition offer this year. Yahoo investor Capital Research Global Investors, which asked Broadridge to review its vote count, has been critical of Yang's negotiations with Microsoft.

``It's embarrassing to the board to have those kinds of low numbers,'' said Charles Elson, director of the John Weinberg Center for Corporate Governance at the University of Delaware in Newark. ``It doesn't happen very often. It signals substantial shareholder discontent.''

Broadridge collected votes from its clients and passed them on to Yahoo's independent election inspector. The final printout sent to the tabulator was truncated, Broadridge said today.

Yahoo Chairman Roy Bostock won re-election with 60 percent of the vote, the lowest margin of victory among the board members. That was down from the earlier report of 80 percent. Even after the changes, the directors were all re-elected.

Icahn Detente

Yahoo had faced a proxy fight for control of the board from billionaire investor Carl Icahn. The two sides forged a truce in July, when Yahoo agreed to give board seats to Icahn and two directors he endorsed.

Yang and the board should consider a ``strong action,'' such as a $5 billion stock buyback, to placate shareholders and show the company is more valuable than Microsoft's offer, said Colin Gillis, an analyst at Canaccord Adams Inc. in New York.

``The current management team needs to execute to keep their jobs,'' said Gillis, who has a hold rating on Yahoo's shares. ``You've got large holders that have suffered a performance hit due to this deal not working out.''

Yahoo rose 44 cents to $19.82 at 4 p.m. New York time in Nasdaq Stock Market trading. Since Yang took over in June 2007, the stock is down 30 percent.

Chasing Google

The company is losing market share in U.S. Internet searches, dropping to 20.9 percent as Google Inc. lures away users. Analysts estimate that net revenue growth will slow this year to 10 percent, the fifth straight year of deceleration.

Yang is counting on investments in technology to attract more advertising to Yahoo's site and its partners' Web pages. He has forecast net sales of $8.8 billion in 2010, a 72 percent increase from last year.

``We are still in the middle of a massive transformation,'' Yang, 39, said last week at the shareholder meeting. ``The Internet is still the only industry, really, that's growing in advertising revenue.''

Investors representing 353 million shares withheld their votes for Yang, suggesting that faith in those growth prospects may be eroding.

``The leadership of the company's being contested,'' said James Post, a professor at Boston University's School of Management who studies corporate governance. ``It's rare that a CEO doesn't get an overwhelming vote of confidence,''

Ad Slump

A slowdown in advertising spending may make Yang's task more difficult. Research firm Magna Global lowered its growth projection last month for U.S. sales of picture ads, such as Web banners. The New York-based firm said the market will grow 12 percent this year, down from an earlier forecast of a 17 percent gain, as soaring fuel and food prices curb spending.

Mithras Capital, another Yahoo investor, called for a separate investigation into the vote count. There were 200 million fewer votes cast in the latest meeting than the average of the previous two years, the company said today in a statement.

Shareholders who originally voted for Icahn and his rival board candidates may not have been counted because of the confusion following Yahoo's accord with Icahn, said Mark Nelson, a partner at Mithras in St. Helena, California. His company owns 1.7 million Yahoo shares.

``Shareholders who voted the Icahn slate before the agreement was announced could easily have been misled into thinking that, having already voted for the Icahn slate, their vote was recorded as `withheld,''' Nelson said in the statement.

Yahoo spokesman Brad Williams didn't immediately respond to a phone message seeking comment.

Source:Bloomberg