Microsoft CFO: Yahoo a 'declining asset'

Speaking to financial analysts, Chris Liddell concedes online business hasn't shown much tangible progress, but says Yahoo deal making less and less sense.

REDMOND, Wash.--Microsoft CFO Christopher Liddell said Thursday that Yahoo is a "declining asset" and that the chances of a full-on acquisition are now "negligible."

Liddell elaborated on CEO Steve Ballmer's earlier comments , saying the company went into its bid "totally genuine" but soured on a deal because it was taking too long. He called Yahoo a "declining asset."

"Time passed and value eroded," he said. "I think the chances of us buying Yahoo...are so small that they are essentially negligible."

A search deal, he said, is still possible, but suggested there too the clock is running. Liddell said that Microsoft would reach a point in its organic growth strategy where even that would stop making sense.

The CFO's least favorite chart: Microsoft's share price. Microsoft

Liddell started off his presentation to financial analysts gathered here with what he said was his least favorite chart: Microsoft's share price.

"It is an incredibly frustrating chart, particularly when you look at the year we just had," Liddell said, pointing to the fact the company grew revenue 18 percent and per-share earnings by 26 percent (excluding legal charges).

The stock, he noted, was broadly in line with major indices. But he said, acknowledging what everyone in the room was clearly thinking, "Clearly that's not a satisfactory level of success."

He said that the stock price was "doubly frustrating" since in the middle of its fiscal year, Microsoft's stock was up 20 percent and performing ahead of the broader trends.

Liddell pointed to continued growth in Microsoft's core business as well as improvements in some of Microsoft's emerging business, but then turned to the big disappointment: its online efforts.

"Clearly in online it's tougher," he said. "It's the one to which, at least at this stage, we've made the least tangible progress."

 

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