Yahoo sets own path for growth and stands firm on Microsoft

by Tristan O'Carroll , Media Week 18-Mar-08, 14:42

LONDON - Yahoo has reaffirmed its opposition to Microsoft's takeover attempts, unveiling plans to double revenues over the next three years.

Yahoo said its three-year plan would double operating cash flow (revenues minus operating costs) over the next three years from $1.9bn (£940m) to $3.7bn (£1.8bn).

Key sources of projected growth in revenue cited in the presentation include $1.9bn (£940m) in added revenue over the next three years from display and video advertising. The company said it "expects its growth to outpace the currently anticipated market rate of growth in online display/video advertising".

The company also expects $1.4bn (£692m), in added search revenue. The financial plan was first presented to Yahoo's board of directors in December 2007, before it received the unsolicited acquisition proposal by Microsoft.

A Yahoo spokesman said: "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."

Chief among its other plans, Yahoo plans to enhance its front online pages, Yahoo.com and My Yahoo, as well as its search, mail and mobile services to boost their user appeal. In addition, it plans the development of a new ad platform designed to simplify online advertising buying and selling, as well as improvements to the Panama search advertising platform.

Roy Bostock, chairman of Yahoo, said: "We are pleased to share with the market more details about our business and our expectations for Yahoo's financial performance, which provided context for our board's unanimous rejection of Microsoft's unsolicited proposal."