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Apr. 22, 2008 at 11:05am Eastern by Greg Sterling
All Eyes On Yahoo Earnings Today
Today after the stock market closes, Yahoo will report earnings. Silicon Alley Insider offers a preview based on sources cited in the NY Post: "Several sources close to Yahoo! said the company will not blow the lid off earnings, but will likely beat analysts' expectations of 9 cents a share and revenue estimates, excluding traffic acquisition costs, of $1.32 billion."
Jerry Yang essentially said that Yahoo would have a solid quarter in his reply to Microsoft's "ultimatum" letter. Microsoft Steve Ballmer has already said , however, that Yahoo's results won't affect Microsoft's offer or position:
"We think we can accelerate our strategy by buying Yahoo and will pay what makes sense for our shareholders," Ballmer said. "I wish Yahoo all the success with its results, but it doesn't affect the value of Yahoo to Microsoft."
The real question is: will positive -- better than expected -- results (and subsequent guidance) affect Yahoo's institutional shareholders and their perceptions of the deal and its value? Institutional shareholders appear to favor the current deal on the table but the second largest, Legg Mason, would like to see a sweetened offer.
Strong Yahoo results and, especially, strong guidance will make it somewhat harder for Microsoft to win a proxy fight with its current bid. In-line results and tepid guidance will strengthen Microsoft's hand because institutional shareholders will likely want to take the money and run in a weakening economy.
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By Greg Sterling
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