Embattled Sunnyvale, California-based Internet pioneer Yahoo, six weeks into a standoff with Microsoft for  control of the Web media firm, has said it is on pace to make its earnings estimate for 2008 and predicted that by 2010 its revenue, after advertising commissions, will reach about $8.8 billion, more than 70 percent higher than 2007 figures, in an unscheduled internal projection Yahoo released Tuesday. The bright outlook comes as Yahoo seeks to convince Microsoft to increase its bid, which now values Yahoo at $41.4 billion, to an offer of more than $45 billion, before it would be willing to sell, Yahoo said. Yahoo Facing Narrowing Options Yahoo, facing narrowing options, said that it expects to present the new internal financial forecast at investor meetings this week, where it will look to explain why it doesn't want to sell unless Microsoft raises its bid, and to show its suitor several key business advantages to doing so. The forecast, made in a stockholder presentation filed with the United States Securities and Exchange Commission, appears to show a firm with a strong desire to remain independent unless the world's biggest software maker increases its unsolicited bid. While senior executives at the firms held a face-to-face meeting last week in Silicon Valley that some saw as a minor breakthrough and a sign that meaningful negotiations could begin, Microsoft has not increased its original offer of $31 per share, nor has Yahoo met with success trying to court other suitors such as AOL and News Corp. Yahoo, which expects to nearly double its cash flow during the next three years, to $3.7 billion, initially rejected Microsoft's offer because it "substantially undervalued" the firm. Yahoo expects revenue to rise from $5.7 billion this year to the $8.8 billion figure noted in the filing. Wall Street Poll Predicts Microsoft Success Speculation among industry analysts has tended toward a belief that Microsoft will eventually acquire Yahoo. A recent poll of 21 Wall Street brokerage firms conducted by Reuters echoed  such speculation, and found that many analysts predict Microsoft will succeed in its takeover of Yahoo without having to raise its bid. 14 of the 15 Wall Street analysts in the poll who track Yahoo said they felt that Microsoft would succeed in its bid, a belief held by all 8 of the analysts who follow Microsoft, according to the Reuters poll. "Yahoo provides meaningful strategic value and warrants a significant acquisition premium above its equity value," Yahoo said in the Tuesday Commission filing. "Yahoo is positioned for accelerated financial growth. [...] We have a powerful consumer brand, a huge global audience and a highly profitable operating model," said Yahoo chief executive and co-founder Jerry Yang in a statement Tuesday. Chief Executive Yang Files Aggressive Forecast Since taking over as chief executive from former CEO Terry Semel nine months ago, Yang has sought to implement plans to make Yahoo more successful, and Tuesday's filing said that were Microsoft to increase its bid, the addition of Yahoo would boost the Redmond firm's Internet display and search advertising business, from a position Yahoo described as "sub-scale". Yahoo has forecast $1.9 billion in revenue over the next three years in online display and video ads, excluding affiliate payments, in one of the key areas targeted by Yang as crucial to a Yahoo turnaround. Yahoo has projected $1.4 billion in added search revenue, which will keep it on pace with the general search market as a while, according to the Tuesday filing. The filing also said Yahoo would likely increase Microsoft's success is Asia, where Yahoo holds a position widely regarded as strong. In its January financial forecast, released just before Microsoft's takeover bid, Yahoo cautioned investors to expect only small growth throughout 2008, after the firm saw falling profits in 2006 and 2007. Yahoo said Tuesday that it first outlined its long range financial projections to board members in December 2007, also ahead of the Microsoft bid. Industry Reaction To Growth Forecast Members of the online discussion forums operated by WebmasterWorld, a community of webmasters and search engine marketing (SEM) professionals founded by chief executive Brett Tabke,  reacted swiftly to Yahoo's Thursday forecast filing. One WebmasterWorld member sees the Yahoo financial forecast as overly optimistic. "Yahoo should just let Microsoft buy them. Coming out with crazy growth statements just makes them look foolish," the member, using the handle "sem4u," noted. Another WebmasterWorld member sees the forecast as the latest in a series of mistakes made by Yahoo. "Yahoo is making a mistake. The stock market was giving them good money and they should have taken it," noted a WebmasterWorld member using the handle "Hunter." "They must be quite off their rockers if they think Microsoft is stupid enough to fall for this and give them more money, added another member who used the handle "WiseWebDude." Yahoo Seeks Higher Microsoft Bid With Strong Growth Forecast Despite the turmoil Microsoft's unwanted bid has caused, Yahoo said Tuesday that it is still on course to meet 2008 revenue goals of $5.7 billion. For 2009 and 2010 Yahoo expects faster  growth than predicted by six analysts, it said in the filing, with revenue rising some 25 percent. In a little more than two weeks Yahoo will release its first-quarter financial report. Some analysts see the forecast Yahoo made Tuesday as an aggressive move that may also be a sign that negotiations with Microsoft are becoming more amicable. The move by Yahoo may have come as welcome news to investors, as shares in the firm rose $1.81, or 7 percent, to close at $27.66 during Tuesday trading. After hours trading also saw Yahoo share prices up slightly. Related Links:
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11:03 pm on Mar. 18, 2008 (utc 0)