Embattled Sunnyvale, California-based Internet pioneer Yahoo on Tuesday announced first quarter earnings  that topped analyst expectations but fell short of the type of explosive growth that some felt could cause Microsoft to increase its $44 billion bid for the firm. Yahoo chief executive and co-founder Jerry Yang said his company remained open to possibilities including a deal with Microsoft, while Steve Ballmer, chief executive at the Redmond, Washington-based software giant, said the Yahoo earnings results did not change his company's opinion on the fairness of his firm's unsolicited bid for Yahoo. "We are offering a lot of money," Ballmer said Wednesday at a conference in Milan. "If Yahoo's shareholders like it, that's great. We are prepared to go forward without a merger with Yahoo," Ballmer added. Rapidly Rising First Quarter Income Helped By Alibaba Nearing the three month point in its standoff with Microsoft, Yang characterized Tuesday's earnings report as a sign that Microsoft's takeover offer fails to fairly value Yahoo. Yahoo reported rapidly rising first quarter income of $542 million, up from $142 million during the same quarter in 2007, a rise of 37 cents per share topping a 10 cent rise a year prior, figures Yahoo attributed in part to investment gains. A stake in China's largest online commerce company Alibaba Group helped Yahoo with a non-cash gain of $401 million. Alibaba recorded the biggest initial public offering ever for an Internet company in China, when it raised $1.7 billion in November 2007. While Yahoo raised 2008 profit forecasts Tuesday, it said projections of revenue gains would remain unchanged. Yahoo reported that its revenue expanded by 9 percent to $1.81 billion, while its net revenue grew to $1.35 billion, a 14 percent gain not taking into account the commissions its marketing partners received. Wall Street analysts had forecast net revenue of $1.32 billion, while Yahoo had predicted revenue increased between 8 and 17 percent. Yahoo Earnings Rise Yet Fail To Alter Microsoft Bid Tuesday's earnings report from Yahoo showed its first quarterly profit in over two years, and left it only four days before a Saturday deadline imposed by Microsoft, after which Ballmer has indicated Microsoft would seek  to overthrow Yahoo's board of directors with a slate of its own, and threatened to lower his company's buyout offer. "Time is money, we've made that clear," Ballmer said Wednesday after giving a speech at a Microsoft event in Milan. With positive earnings that its board members and shareholders were likely to embrace, Yahoo appears to have shown that it has had success weathering the general economic downturn. "We are totally committed to maximizing the value of this asset," Yang said during a Tuesday conference call detailing the company's earnings. Two areas of decline Yahoo reported yesterday were in its affiliate network and international revenue. Yahoo has remained steady in its rejection of Microsoft's offer on the grounds that it undervalues the world's top Web destination. Related Links:
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