Washington  - Internet services company Yahoo is in the middle of a massive transformation but will soon see results, CEO Jerry Yang told investors at an annual meeting Friday.

Yahoo executives tried to placate investors who were upset about the failed merger with Microsoft, saying the company acted in the interest of shareholders.

Yang, who was facing investors at his first annual meeting as CEO, has been under pressure after spurning a 47.5-billion-dollar buyout offer from Microsoft.

But investors re-elected the internet company's board, with 85 percent of votes supporting Yang.

Last month, Yahoo struck a compromise deal with rebel shareholder Carl Icahn, giving him and his associates three seats on the board.

In return, billionaire corporate raider Icahn dropped his bid to replace the entire board and CEO Yang. Icahn began waging a proxy war in May after Yahoo rejected as undervalued the Microsoft offer.

"The internet is still the only industry, really, that's growing in advertising revenue," Yang assured investors. (dpa)