Kind of a quiet week in the technology corner of the stock market. That's not so bad, as people can exhale and figure out if the latest Federal Reserve move to cut the Fed Funds rate by .75 points signals the bottom (finally) of the bearish stock market. if so, then buyers will move back into the market and some semblance of sanity can prevail as the big financial houses move to stabilize themselves amidst the aftershocks of the credit and lending crisis.
One tech story that only grows bigger, however, is the Yahoo-Microsoft face-off. On Tuesday, Yahoo's directors made a pitch to shareholders to back Yahoo, and not Microsoft, in any bid to merge the two companies. Yahoo wants no part of any merger, unless Microsoft ups its initial takeover offer of $44.6 billion, and is breaking out the big financial guns to paint a rosy picture of the web portal giant's financial fortunes.
That's why Yahoo told its investors Tuesday that the company could increase revenue by more than 50 percent and double cash flow in coming years. It also offered, via documents recently filed with the U.S. Securities and Exchange Commission, that the bulk of its future growth should from Internet display advertising, including banners and video advertising, as opposed to traditional search advertising.
In a separate news release, Yahoo says it is poised for "accelerated financial growth" in 2009 and 2010, according to Chief Executive Jerry Yang, who used his CEO bully pulpit to highlighted the company's key assets of powerful consumer brand, large global audience and profitable business.
Internet advertising at Yahoo has taken a one-two punch to the nose from popular social networking websites like Myspace and Facebook in recent years. Thus, the shift from traditional Internet advertising to more cutting-edge themes like video ads and paid search offerings.
The feeling on Wall Street was that Yahoo was trying to send a message not to its shareholders this week, but to Microsoft.
"The company is clearly laying out a very optimistic scenario," Ross Sandler, an analyst at RBC Capital Markets, wrote in a research note. "Judging by recent history, we remain skeptical of Yahoo's ability to execute smoothly against this plan. If the overall economy and the online advertising space were in a healthier place right now, we would have more confidence. At the very least, this is a smart last-ditch effort by Yahoo management to squeeze a few more dollars out of Microsoft."
If so, then yahoo's plan could actually work, he adds. "We believe that the Microsoft/Yahoo deal ultimately goes through, and that today's argument could push Microsoft to sweeten its bid to avoid a hostile takeover which may alienate Yahoo employees," he wrote.
That's probably what will happen. Stay tuned.