Fingers crossed on Microsoft earnings

If you take Steve Ballmer at his word, the only way Yahoo shareholders may be able to squeeze a bit more money out of Microsoft Corp is to pray for a stellar earnings report from the software company Thursday afternoon.

microsoft-ceo-steve-ballmer.jpgThe Microsoft CEO has been talking tough all week from Morocco to Milan, saying he wouldn’t raise the company’s bid for Yahoo — now valued at $43.8 billion — even after the Web pioneer’s quarterly results came in a bit better than expected.

With 50 percent of the offer consisting of Microsoft shares (the rest is cash), Yahoo’s shareholders need a solid earnings report from Ballmer … or the value of the bid could fall further with Microsoft’s share price .

At Microsoft’s current stock price of $31.45, the deal values Yahoo at $30.45 per share (our math: [MSFT share price x share swap ratio of 0.9509] + $31 and divide the whole thing by 2). To get the bid back to $31 per share — the value when the offer was first made on Jan. 31 — Microsoft’s outlook needs to be strong enough to boost its shares to about $32.60, equivalent to a 3.7 percent rise.

But to get Yahoo shareholders a buck more to $32 per share, they’d need a blow-out quarterly report from Microsoft that would push its shares up 10.3 percent to $34.70.

Microsoft stands firm on Yahoo bid

ballmerfinger2.jpgThose of you who missed him in Morocco caught up with Microsoft CEO Steve Ballmer in Milan after Yahoo reported better than expected results, even though they fell short of stellar.

No surprise, he’s standing firm on the $44 billion offer and promises to stick by a threat to go directly to shareholders if Yahoo rejects the offer by the Saturday deadline.

Bloomberg also reports that Ballmer is willing to walk away from the deal. “We are prepared to go forward without a merger with Yahoo,” Ballmer says.

Yahoo: No surprises there

jerry-1.jpgWe weren’t expecting huge surprises during Yahoo’s earnings conference call, but CEO Jerry Yang was spectacularly vague about the Internet company’s plans vis-a-vis Microsoft or any other potential tie-ups — with Google, Time Warner’s AOL or News Corp — that Yahoo has been working on.

At the very start of the call, Yang essentially said “Don’t go there” to analysts and investors, reminding them about the purpose of the call.

“I’d like to remind you that today’s call is about our Q1 results, so please direct your questions to the quarter if possible,” Yang said.


schmidt.jpgGoogle suprised the market with better than expected quarterly results despite worries that it was being hit by economic weakness after comScore data showed it having trouble converting Web search into ad viewer. Google CEO Eric Schmidt even went as far as to say the company would still perform well for the whole year ”regardless of the business environment.” For investors, the results wiped away fears that Google was just as vulnerable as any company to recession fears and, as of this morning, company shares were up more than $80.

Some analysts noted that Google growth slowed from the previous quarter and that the good results did not completely eliminate concerns about its prospects (New York Times) . While Lehman and Merrill Lynch rushed to see who could raise their price targets for Google higher, shares of comScore quietly fell 8 percent. 

Schmidt gave less satisfaction in his comments on the company’s dealings with arch-rival Yahoo, but his tone was sweet: “It’s nice working with Yahoo and we like them very much.”

Yahoo’s Google test works! Now what?

yahoo.jpg“It’s a success! Now what?”

Yahoo may be ready to turn over its Web search advertising to Google following a successful test using Google’s service to deliver ads alongside its Web search results. But that’s only the beginning of what could be a swirl of deals. Or Not.

The way PaidContent sees it , if this alternative stands, and then, say, AOL merges with Yahoo, then the Google-Yahoo arrangement may have to pass anti-trust muster. And regulators are likely to give a thumbs up, TechCruch says, adding this rosy tidbit:

Everyone, even Yahoo, realizes that a Google search deal is a slow but certain death for the company.

NY Times buyout offers to become layoffs

The New York TimesAnother day, another story about job cuts and cost cutting in the publishing business.

This time its the New York Times, where an offer of voluntary buyouts may turn into involuntary dismissals.

Back in February, the company said it would eliminate 100 newsroom jobs amid the weakening economy and declining revenues from advertising and circulation. An attempt was made to keep the move bloodless but that didnt quite work. In an internal memo, assistant managing editor Bill Schmidt said the number of people expected to take buyouts likely won’t meet the 100 target.

Media giants mull Yahoo deals

The Time Square Yahoo sign is seen in New YorkWhat does the future hold for Yahoo? With so many media titans in the picture, it’s anyone’s guess how this merger mashup will end.

Just as it appears more likely that Yahoo’s days as an independent entity is drawing to a close, comes a possible deal that would lead to a bigger and better Yahoo.

News Corp is considering joining Microsoft in its bid, which would bring in MySpace and create a more formidable rival to Google.

Yahoo investor backs management if Microsoft trims bid

yang-pensive.jpgYahoo shareholder Legg Mason tells the Wall Street Journal it’s ready to back Yahoo’s effort to stay independent if Microsoft lowers its buyout offer.

In an interview, portfolio manager Bill Miller of Legg Mason, which is the second biggest Yahoo shareholder with a nearly 7 percent stake, calls Microsoft’s moves to threaten a lowered bid a “blunder.”

“If Microsoft lowers the price I’m not prepared to say that’s better than Yahoo remaining independent,” he said.

Yahoo to Microsoft: $teve, let’$ talk

Jerry Yang, Yahoo CEO and co-founder speaks at a keynote address at the CES in Las Vegas

“Dear Steve, it’s us, the Yahoo Guys again. Thanks for that whole deal deadline thing. Listen, our business is doing just fine. If you want to talk some more about acquiring us, $ay $omething we haven’t already heard, OK? Thanks. Jerry.”

The letter from Yahoo’s board released on Monday said the Web media company still isn’t pleased with Microsoft’s $31 a share offer, but hey, that doesn’t mean they can’t work something out, you know, for more money.

“We have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders. Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.”

Trouble in FIM-land

myspace.jpgNews Corp jewel Fox Interactive Media (a.k.a the catchy “FIM”) made a late-night admission that its revenue might fall short of a $1 billion target for the current fiscal year.

The division that houses teen hangout MySpace is also revamping its advertising sales division to embrace a new technology that mines user profiles on the social network site to serve visitors more individually-tailored ads.

“We expect to be close to our target,” FIM said of its revenue for fiscal 2008. One company source said the timing of the new ad technology could be partly to blame for any shortfall.