Yahoo! Inc. (NASDAQ:YHOO) will deliver mixed first-quarter results when it announces earnings after the stock market closes Tuesday, with "improvements in search
offset by a decline in display," predicts Jefferies & Co. analyst Youssef Squali in a research note Monday.
Jefferies' buy rating is "buoyed by the new CEO's sense to urgency to maximize shareholder value."
Yahoo! CEO Carol Bartz and Microsoft Corp. (NASDAQ:MSFT) CEO Steve Ballmer have been talking about a potential partnership that involves Yahoo!'s outsourcing search to
Microsoft in return for serving display ads on its properties. Last week, Squali said such a deal could
save the search engine maker $1 billion and more.
Reporters hope Bartz (pictured) will provide an update on the talks with Microsoft, but if she follows her own
rules, she'll be mum on the topic. Bartz has said she told Ballmer, "I
am not going to negotiate with my 55,000 favorite friends," referring to Microsoft's employees.
Analysts
surveyed by The Associated Press expect Yahoo!'s net revenue to drop by about 10% in the first quarter.
Yahoo!'s earnings will follow last week's
results from Google Inc. (NASDAQ:GOOG), which were
better than expected but showed the search leader's slowest growth since
the company went public in 2004. -
Mary Kathleen Flynn
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