Yahoo’s first-quarter revenue and profit beat Wall Street’s estimates, but Microsoft is unfazed by the financial progress. In fact, before the earnings reports were even released, Microsoft CEO Steve Ballmer said he wouldn’t raise the bid for Yahoo no matter how well Yahoo performed.
Yahoo’s revenues were $1.82 billion for the first quarter of 2008, a nine percent increase compared to $1.672 billion for the same period of 2007. Marketing-services revenues were $1.572 billion for the first quarter of 2008, a seven percent increase over the year-ago period. Gross profit for the first quarter of 2008 was $1.063 million, an 11 percent increase over the first quarter of 2007.
Jerry Yang, co-founder and CEO of Yahoo, said he believes the company can significantly accelerate its revenue growth, return to its historically high margins, and double its operating cash flow by 2010.
“This quarter’s solid performance underscores the fact that we are executing on that plan. Yahoo is beginning to realize the benefits of the very substantial and deliberate long-term investments we’ve made to capitalize on the opportunities ahead in display and to recapture momentum in search,” Yang said.
Microsoft’s Ultimatum Nears a Head
Yahoo has rejected Microsoft’s $44.6 billion bid — twice. Ballmer sent what amounts to an ultimatum letter to Yahoo’s board in early April. The letter made clear that Microsoft’s goal in making “such a generous offer” was to create the basis for a speedy and ultimately friendly transaction.
Ballmer wanted Yahoo to authorize a team to negotiate and come to a definitive agreement. He then threw down the gauntlet: a three-week deadline to come to a conclusive agreement — or else. That three weeks ends on Saturday. Yahoo is still not budging, and neither is Microsoft.
“We are offering a lot of money,” Ballmer said at a Microsoft conference in Milan on Wednesday….