Yahoo! has released an investor presentation that outlines the company's long-term financial plan. According to their press release, this financial plan was generated before Yahoo! received a hostile takeover bid from Microsoft. You'll forgive me if I have my doubts about that. Because unless Yahoo! cures cancer or has a secret unicorn farm somewhere, I can't see how this projection of revenues is anything but wishful thinking. Wishing for a higher bid from Microsoft, that is.
The presentation supports the unanimous determination by the Company's board of directors that Microsoft's January 31, 2008 unsolicited acquisition proposal substantially undervalues Yahoo!. The board cited Yahoo!'s global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as its substantial unconsolidated investments, as factors in its decision. Yahoo!'s board of directors is continuing to evaluate all of its strategic alternatives to maximize value for Yahoo! stockholders.
Yahoo!'s management today also reaffirmed its outlook for the first quarter 2008 and full year 2008, as previously provided on January 29, 2008.
Key sources of projected growth in revenue and operating cash flow cited in the presentation include $1.9 billion in added revenue ex-TAC over the next three years from display/video advertising, as Yahoo! expects its growth to outpace the currently anticipated market rate of growth in online display/video advertising. The Company also expects $1.4 billion in added search revenue, implying growth essentially in line with the anticipated market rate of growth in search advertising.
"Yahoo! is positioned for accelerated financial growth - we have a powerful consumer brand, a huge global audience and a highly profitable operating model," said Jerry Yang, the Company's co-founder and chief executive officer. "With industry-leading tools, technology, people and platforms, Yahoo! is poised to capture growth in display advertising where we believe growth will be greatest. Combined with our recent progress in search monetization, Yahoo! is well positioned to provide the broadest range of products to our advertisers while delivering the most compelling experiences to users."
I have selfish reasons for wanting Microsoft to purchase Yahoo!. I know that if Microsoft's bid is accepted, boring old Microsoft will make Yahoo! drop the ridiculous exclamation point at the end of their name, and I won't have to type it any more, or try to figure out if you put a period after the exclamation point at the end of a sentence. And maybe I won't have to read press releases typed in light purple text any longer, either. At least there was no sparkle.