Microsoft CFO to Yahoo: This weekend is deadline for buyout bid
By Jacqueline Emigh, BetaNews
April 24, 2008, 6:48 PM
If Microsoft doesn't "make progress" in its Yahoo buyout bid by this weekend, the Redmond company will move on to options that include taking the offer to Yahoo shareholders and dropping the acquisition offer entirely, said Chris Liddell, senior VP and CFO at Microsoft, in a conference call late Thursday.
"[But] Microsoft is focused on the online ad market," due to industry predictions of major growth in this space over the next few years, Liddell told financial analysts and journalists during Microsoft's third quarter financial call.
Microsoft did post a profit for the quarter, however, due mainly to positive sales results for its Xbox games console and business server software. The big drops came in sales for Windows and Office, but those are largely attributable to a deferral of Vista and Office 2007 revenue until the first quarter of 2007, even though sales began in late 2006.
Taking the deferral out of the equation, the client division that sells Vista still saw sales fall 2 percent from the previous year. Despite a growth in advertising sales, Microsoft's Web division posted a loss of $228 million, a sign that the company needs to make major changes, and may look elsewhere if shunned by Yahoo.
In a Q&A session at the close of today's call, Liddell acknowledged that his company might also consider a buyout of another company if the Yahoo merger doesn't happen.
"We've been clear that speed is of the essence in the [Yahoo] deal," according to Liddell.
But Yahoo seems to have an "unrealistic" concept of its own long-term value, the Microsoft CFO said, pointing to Yahoo's own recently released financial results.
"Yahoo [continued] to lose search share [and] profit," according to Liddell. "But that said, we're here today to discuss our earnings."
Beyond announcing its quarterly earnings today, Microsoft projected revenues of between $66.9 billion and $68 billion for fiscal 2009, foreseeing continued demand in the server software markets and big gains on both the entertainment and advertising sides.
Microsoft's projected revenues for 2009 were higher than Wall Street expections, as were the company's projected earnings of $2.13 to $2.19 per share for the fiscal year.
Liddell said that the projections did not include the impact of any possible acquisition of Yahoo.
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