On the eve of Yahoo's! annual shareholders meeting, The New York Times reported that Terry Semel, the company's much-maligned CEO, would face some of his critics who challenged his bloated compensation package in light of lackluster corporate performance. 

Semel answered criticisms leveled at his leadership of Yahoo by pointing out some of the company's accomplishments, saying it is the No. 1 homepage, the largest email service and accounts for 13 percent of time spent online in the U.S. Semel also said that the future for Yahoo looks bright because of the projected explosion of online media in the coming years.

While Yahoo lags behind Google in the search category, Semel stressed the strength of Panama, which launched in February.  

"Panama is the biggest and most ambitious thing any company has ever done in search," he said. "There is no question that we will narrow the search gap."

While some analysts have criticized Semel for letting rivals dominate the mergers and acquisitions landscape, Semel stressed the importance of small buys and in-house development, citing the success of Flickr and the launch of Answers.

Semel also touted the acquisition of Right Media, which he called the third leg of the stool, saying the open exchange would change the way the online ad world does business.