With or without Yahoo!

25 Apr 2008

On the back of strong quarterly results with US$14.45bn in revenue, Microsoft tackled the Yahoo! question, stating it would surge ahead with its online advertising plans whether Yahoo! came on board or not.

“With or without a Yahoo! combination, Microsoft is focused on the online advertising market, which is expected to double by 2010 to US$80bn,” said Chris Liddell, chief financial officer for Microsoft, in yesterday’s quarterly results conference call.

Yahoo!’s equally favourable quarterly results may have been seen as a possible bargaining point to up the Microsoft offer of US$43bn in ‘cash and share’ options.

“Our initial offer was extremely generous, more than a 100pc premium for Yahoo’s core business, and our view on value is shaped by the long-term value of the company, and we intend to remain disciplined in our approach,” he added.

Liddell opined that Yahoo! had”unrealistic expectations” if it felt the standing offer undervalued it and made reference to the company dragging its heels in the face of the inevitable.

Meanwhile, Microsoft’s entertainment and devices division has been doing exceptionally well, with revenue up 68pc on the same quarter last year, which the company attributes largely to the demand for the Xbox 360 gaming console.

Sales of the Microsoft next-gen games console pass 19 million in this past quarter and were up 74pc on this period last year.

By Marie Boran

Pictured: Microsoft’s headquarters in Redmond, Washington