Yahoo! predicts a rosy two years

Yahoo! claims the outlook for the next two years is rosy in a statement designed to give investors a better understanding why it deserves a price tag of at least €28.69 billion/US$45 billion, if Microsoft is to pursue its hostile bid. An Associated Press report said analysts interpreted the company's unscheduled disclosure as a sign that Yahoo!'s attempts to find an alternative deal to Microsoft's six and a half week-old offer aren't bearing fruit.

The company has been exploring alliances with Google, News Corp's and Time Warner's AOL, the report added.

With its options apparently narrowing, Yahoo! is under pressure to justify its board's decision last month to rebuff a takeover offer that was 62% higher than the company's market value when the courtship began. Microsoft's cash-and-stock bid was initially valued at €28.44 billion/US$44.6 billion, or €19.76/US$31 per share, a price that Yahoo concluded wasn't enough, even after a two-year decline in the company's profits.

The forecasts predict Yahoo!'s revenue, less advertising commissions, will climb more than 70% during the next three years to reach €5.6 billion/US$8.8 billion in 2010, the report said.

Microsoft so far hasn't wavered from its original offer, which it has described as fair. What's more, the software maker has indicated it will try to oust Yahoo!'s board if the resistance continues.However, the two sides signalled they might be ready to negotiate last week when senior executives from Yahoo! and Microsoft held their first face-to-face meeting in Silicon Valley, the report concluded.