Yahoo! paints rosy picture, partner thinks Microsoft will prevail
Thursday, 20 March 2008, 17:27 IST
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New York: Yahoo! looked to a bright future over the next three years to bolster its argument that it is worth more than what Microsoft offered, but the moves by its Chinese partner underscore investor doubts that the web portal can stay independent. Yahoo! forecast released in a regulatory filing was intended to convince investors that it has a bright future as an independent company, despite a series of recent struggles. But unconvinced analysts are concluding that the report was merely a tactic to get Microsoft to raise its bid, initially valued at $44.6 billion or $31 a share. Yahoo!'s executives are meeting major shareholders this week to show strong revenue and cash flow projections. The company expects operating cash flow to nearly double during the next three years to $3.7 billion, and revenue, excluding commissions on advertisements, to reach $8.8 billion in 2010, a 72 percent gain from last year. "Yahoo! is positioned for accelerated financial growth - we have a powerful consumer brand, a huge global audience and a highly profitable operating model," Jerry Yang, Yahoo! chief executive, said in a statement. The firm said that investments in Asia, particularly in Chinese e-commerce giant Alibaba Group, which are not reflected on its balance sheet, add a great deal to its overall value. Alibaba, however, is talking to investors to finance purchase of Yahoo!'s 39 percent stake in it in a bid to expand its management independence, should Microsoft's bid prevail. The talks signal Alibaba's belief that Microsoft could still succeed in acquiring Yahoo!, the Wall Street Journal said Wednesday. Riding on speculation that Alibaba's management will seek to defend its independence against Microsoft, its shares surged 14 percent to HK$13.86 at the end of trading in Hong Kong Wednesday, the second-biggest advance since the stock began trading in November. Back in the US, Yahoo! outlook's release helped its shares to close at $27.66, up seven percent. Microsoft's stock was up $1.12 to $29.42, a four percent gain.
Source: IANS
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