Yahoo revenue up, but Microsoft holds its bid

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Yahoo has reported its quarterly results, claiming an increase in revenue and profit.

But the results were not enough to force Microsoft to boost its $44 billion unsolicited bid for the web search firm, as its chief executive Steve Ballmer said today the offer was high enough.

"We know what Yahoo is worth to us. We offered a lot of money: $44 billion. It is not a lot of euros anymore. If their board thinks that's fair, great. If not, we'll move forward," Steve Ballmer said, without explaing what he meant by "moving forward".

Yahoo's chief executive Jerry Yang said in a conference call that his firm is open to a deal. "Our board and management team continue to be open to any and all alternatives, including a Microsoft deal," he said.

Yahoo's revenues gained nine per cent to $1.8 billion, while gross profit jumped 11 per cent to $1.063 billion.

But operating income fell 28 per cent to $121 million, which Yahoo wrote off to severance pay expenses following job cuts last year as well as $14 million in incremental costs incurred to pay for advisors to look at the Microsoft bid, strategic alternatives and related legal costs.

Net income for the first quarter of 2008 was $542 million or $0.37 per diluted share compared to $142 million or $0.10 per diluted share for the same period of 2007.

"We believe we can significantly accelerate our revenue growth, return to our historically high margins, and double our operating cash flow by 2010. This quarter's solid performance underscores the fact that we are executing on that plan," said Yang.

With files from Reuters.

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