The company has a solid quarter, but it loses an opportunity to seize the initiative in the Microhoo discussion.
Stephen Shanklandprincipal writer
Stephen Shankland has been a reporter at CNET since 1998 and writes about processors, digital photography, AI, quantum computing, computer science, materials science, supercomputers, drones, browsers, 3D printing, USB, and new computing technology in general. He has a soft spot in his heart for standards groups and I/O interfaces. His first big scoop was about radioactive cat poop.
Expertiseprocessors, semiconductors, web browsers, quantum computing, supercomputers, AI, 3D printing, drones, computer science, physics, programming, materials science, USB, UWB, Android, digital photography, scienceCredentials
I've been covering the technology industry for 24 years and was a science writer for five years before that. I've got deep expertise in microprocessors, digital photography, computer hardware and software, internet standards, web technology, and other dee
The company had solid revenue growth, expressed cautious optimism about weathering an economic downturn, and modestly beat analysts' profit expectations. Chief Executive Jerry Yang issued lukewarm metaphors: "Our results this quarter demonstrate we are on the right track. We are pursing the right strategy, and it's beginning to bear fruit."
And in after-hours trading, the company's stock was essentially flat.
I'd say "Ho hum," but the stakes are too high right now. Unfortunately, Yahoo didn't show any of its cards.
Yahoo's financial results didn't carry an implicit conclusion, either. They weren't so bad that Microsoft's attempt to acquire Yahoo for $31 a share looks generous or so great that Yahoo shareholders will laugh off their suitor.
"The results, being neither fish nor fowl, presented a pretty clear outcome," said Gartner analyst Allen Weiner. "I think they're at that critical juncture where the best shareholder value they can give people is the $31 per share Microsoft has offered."
• Selling to Microsoft. "Our board and management team continues to be open to any and all alternatives including a sale to Microsoft," Yang said, but, "We will not enter into any transaction that does not recognize the full value of this company."
Given that Yang had no big news to announce, he had to walk a fine line on the conference call. He didn't want to throw in the towel to Microsoft, and he couldn't declare that Yahoo now has got Google running scared. And addressing touchy issues can open a can of worms during the question-and-answer period.
But just as there are consequences for saying something injudicious on the conference call, there are consequences to playing it too straight. If it wants to fend off Microsoft, Yahoo has to prove to its shareholders that its alternatives are real.
For example, sharing some preliminary results from the Google ad test could have helped advance the discussion about just how real some of the company's alternatives are. Analyst estimates accord 9 cents to Google for each ad clicked to 4 cents at Yahoo, so a partnership could be financially important.