April 22, 2008 | Tuesday

Rupert Murdoch and Yahoo’s Q1 earnings call

By Jackie Danicki - Blogger in News |Search Engines |Yahoo |Microsoft

The Web 2.0 Expo gets off to something of a rolling start, with the real action starting tomorrow, which may be why all the noise today was about Yahoo’s earnings results. But first, a great quote from Rupert Murdoch:

I certainly can’t afford to bid against Microsoft, least of all for Yahoo.

Ouch. Did Yahoo’s Q1 results make a fool of Murdoch? Details and analysis after the jump.

[Yahoo] said that net income rose to $542 million, or 37 cents a share, from $142 million, or 10 cents, a year earlier. The net income figure included a net non-cash gain of $401 million related to the Alibaba Group’s initial public offering of Alibaba.com. Yahoo owns a stake in Alibaba Group.

Overall revenue grew 9 percent, to $1.81 billion. Net revenue, which excludes commissions paid to marketing partners, grew 14 percent, to $1.35 billion, slightly higher than the $1.32 billion forecast by analysts.

Detail junkies can check out the full Yahoo-issued Power Point slide deck that accompanied the earnings call.

This, of course, gives Jerry Yang and co a chance to say that Microsoft isn’t offering enough for the company. With five days to go before Microsoft’s deadline for an acquisition agreement to have been reached between the two, it’s looking more and more like they will opt to go down the hostile route and force a proxy battle. Microsoft CEO Steve Ballmer has made no bones about the fact that that is what they will do if need be - along with taking its (probably reduced) offer straight to shareholders.

So how did the market react to Yahoo’s reported earnings? Well, I’ll let analyst Paul Kedrosky’s words say it all:

[W]hen the afterhours market reacts to news from Jerry that Yahoo is guiding cash flows higher by flatlining, then you know that investors have largely checked out.

No wonder Rupert Murdoch “can’t afford” to battle Microsoft, “least of all for Yahoo”.