San Francisco (CA) – Yahoo’s first quarter 2008 results were quite probably the most anticipated financial numbers in the technology industry so far this year. It is the first public report from the online giant since Microsoft announced its desire to buy it.
In the results, Yahoo showed revenues of $1.82 billion, a nine percent increase over the same period last year. The gross profit rose to over a billion dollars, at $1.06B, 11% over 2007.
Net income was $542 million, a big increase in over $142 million during the same time last year, which increases $401 million in non-cash gains by its acquisition of Alibaba.com.
The only decrease was in operating income, which fell to $121 million from $169 million during Q1 2007. That’s a 28% fall.
Yahoo president Sue Decker said the company’s goal “is the simple proposition that if we are the starting point for the most users and proide the most comprehensive, easiest-to-use, ‘must-buy’ platform for advertisers, we can drive the growth in volume and … deliver attractive value to our stockholders.”
The question is how these numbers will affect the continuing push from Microsoft to acquire Yahoo. In February, Microsoft announced it was looking to purchase the online search company for $44.6 billion but Yahoo ultimately declined, saying “our board believes the Microsoft proposal substantially undervalues Yahoo.”
However, owners of the Internet stock leashed out against Yahoo, saying it was not living up to its fiduciary duty to maximize shareholder wealth.
One lawsuit, filed by pension fund group Michigan’s Wayne County Employees’ Retirement Group, claimed that Yahoo executives were “entrenching themselves in office and protecting and advancing their own interests at the expenses of Yahoo and its stockholders while Yahoo’s stock price languishes.”
On the heels of the Microsoft/Yahoo acquisition debate, Yahoo was reportedly in talks to combine its online operations with AOL, bringing the two former Internet superpowers together to provide new advantages for both companies.
Google also stepped up to help Yahoo in online advertising, trying to show a higher value for Yahoo.
Not willing to sit idly by and still determined to bring Yahoo into its portfolio, Microsoft is also hashing out a potential deal with an online giant, News Corp. According to the New York Times, Microsoft and News Corp were planning to offer a joint bid to acquire Yahoo.
The end result is that Yahoo really does not want a Microsoft acquisition, but the question remains at what cost it will avoid this opportunity.