Yahoo! profits triple in Q1, but no new bid expected from Microsoft
Yahoo! triples Q1 profits, but analysts and Microsoft say takeover bid remains the same
Yahoo's profits for the first quarter of this year tripled year-on-year, but analysts don't expect the results to make any difference to Microsoft's takeover attempt.
Yahoo! posted net income of $542.2 million for Q108, up from $124.4 million for the same quarter last year. While Yahoo! executives welcomed the results as evidence that the company is fighting fit and able to hold off Microsoft. Sue Decker, president of Yahoo! commented: "This past quarter's financial results, important acquisitions and most importantly, the string of successful product rollouts demonstrate our enhanced execution against longer-range goals."
Many analysts however said they did not expect Microsoft to raise its current bid of $31 per share, or to make a very modest increase at best.
Jim Friedland, an analyst at Cowen & Co said: "Microsoft is breathing a sigh of relief. Even though these are solid results, given long- and short-term challenges, there's been no overall shift in Yahoo's business. Microsoft's offer is still the best offer on the table."
Microsoft launched its takeover bid in February, but has yet to reach agreement with Yahoo! Redmond has set Yahoo! a deadline that expires on this Saturday, to accept the deal or face a proxy battle.
The software giant's reaction to the Yahoo! results was muted. Microsoft CEO Steve Ballmer told Reuters: "I wish Yahoo all the success with its results, but it doesn't affect the value of Yahoo to Microsoft."
Yahoo! also revealed in the quarterly results that its has already incurred $14m in incremental costs surrounding the takeover bid, including fees for outside advisors, litigation defence costs and exploring alternatives to the deal.