The clock is still ticking on Microsoft’s bid for Yahoo.
On Thursday afternoon, Microsoft reiterated its deadline for Yahoo acceptance: this weekend. If Yahoo does not warm up to the current offer by then, the tech giant will try to mount a proxy fight or find another way to beef up its online advertising biz.
Microsoft chief financial officer Chris Liddell made the company’s impatience with Yahoo clear during a conference call with Wall Street analysts after it issued its earnings report. Microsoft, he said, has always believed “speed is of the essence,” but Yahoo’s response “has been anything but speedy.” He dismissed the notion that Yahoo’s earnings reported earlier in the week justified a larger bid than the January offer, valued at $44.6 billion.
“Yahoo continues to decline year after year,” Liddell said.
Revenue in Microsoft’s online services biz was up 40% to $843 million in its third fiscal quarter ended March 31, but the company wants to grow its ad biz further as more coin migrates online. The company generated $14.45 billion in revenue over the quarter, a slight increase over the $14.4 billion generated a year earlier. Net income dropped 11% due to the $1.42 billion fine from the European Commission.
Xbox 360 sales provided one of the biggest bright spots for the company during the quarter, driving a 68% revenue increase to $1.6 billion in the entertainment and devices division. The company said it sold 1.3 million consoles during the period, typically slower than the holidays, when Microsoft ran out of consoles in certain stores. The company assured analysts that the supply chain was now full of consoles in preparation for next week’s launch of “Grand Theft Auto IV.”
Liddell projected a 32%-34% revenue jump in the entertainment devices category in its fiscal fourth quarter “driven by strong demand for Xbox 360 and Xbox games.” He said the company’s cautious about the economic softness, particularly in the U.S., but said so far it had not hurt Microsoft’s business.