Yahoo!'s Net Income Decreased

Given the troubled economic environment we're living in, Yahoo! couldn’t have won the day. With the second quarter financial report, Yahoo! confirms that the Microsoft deal, the proxy fight initiated by Carl Icahn and the subsequent litigations have cost the company a pricey $22 million. The net income from April to June was of $131 million, compared with the $161 million for the same period of 2007.

The diluted share value dropped from $0.11 to $0.09, which is ultimately the reason for the overall decrease. The maximum point Yahoo!'s shares reached on July 21 on the Nasdaq stock market was of $21.70, which is about $11 less than what Microsoft registered in May, when the Redmond company showed its intention of buying all of Yahoo!.

As it is known, Yahoo!'s officials refused the offer, asking for a $37 price per share. After Microsoft dropped the bid, considering that the Sunnyvale company was not worth such a price, given that it was outran by Google in most of the market segments, the negotiations shifted focus. A possible acquiring of the search business by Microsoft was also discussed, but the staffs of the two failed to reach a reasonable conclusion. On the contrary, Yahoo! decided to team up with its all-time competitor, Google, in the search advertising business. Their partnership is still under legal validation, as some believe that a Yahoo!-Google deal may lead to a monopoly.

Although the financial stats are not so favorable for the Yahoo! camp, its CEO, Jerry Yang, is optimistic, saying that everything that happens is part of the plan. "Yahoo! saw benefits in the second quarter from a number of the strategic initiatives that we have been delivering against, including the roll out of innovations in search and the announcement of a number of important partnerships. We are seeing validation that we have the right strategy as we continue to make transformational investments that position us to take advantage of pivotal trends driving growth on the Internet." he is quoted as saying, trying to appease the stockholders, who are concerned about where the company is heading to.

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