IF online pioneer Yahoo is feeling the stress of a depressed share price and a bitter spat with both Microsoft and billionaire investor Carl Icahn, its founder and chief executive Jerry Yang keeps it well hidden.

Microsoft has taken a US$47 billion offer for the company off the table, and Yahoo’s share price has fallen 20 per cent in the past year.

But for Mr Yang, it’s all upside, and the company is in a great position.

“Yahoo is executing against its strategy, and we believe is well positioned for long-term growth and maximising stockholder value,” Mr Yang said.

And the acquisition acrimony hasn’t been a distraction, he says.

“Yahoo saw benefits in the second quarter from a number of the strategic initiatives that we have been delivering against, including the roll out of innovations in search and the announcement of a number of important partnerships,” Mr Yang said.

“We are seeing validation that we have the right strategy as we continue to make transformational investments that position us to take advantage of pivotal trends driving growth on the Internet.”

Just prior to the Yahoo results announcement, the company said it had settled its proxy battle with Icahn – just in time to avoid the threat of a boardroom spill at the Yahoo annual general meeting in August.

Under the terms of the settlement agreement, eight members of Yahoo's current Board of Directors will stand for re-election at the 2008 annual meeting, including chairman Roy Bostock, and CEO Mr Yang.

After the annual meeting, the Yahoo Board will be expanded, with Mr Icahn being appointed and the remaining two seats filled by the Board on the recommendation of the it’s Nominating and Governance Committee from a list of nine candidates recommended by Mr Icahn.

“I am very pleased that this settlement will allow me to work in partnership with Yahoo's Board and management team to help the company achieve its full potential,” Mr Icahn said after the dramatic events.

“While I continue to believe that the sale of the whole company or the sale of its Search business in the right transaction must be given full consideration, I share the view that Yahoo's valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders.”