Microsoft’s CFO, Chris Liddell, said on Thursday that the software giant may consider launching a hostile bid for Internet giant Yahoo as early as next week.
Yahoo’s management has “unrealistic expectations” of its value, Mr Liddell said. “We have been clear that speed is of the essence to make sense,” he added. Microsoft will provide an update on its plans for Yahoo next week.
The statement was made shortly after the company reported an 11 percent drop in its third-quarter profits.
Yahoo’s deadline was set by chief executive officer Steve Ballmer to accept Microsoft’s unsolicited takeover offer within two days or face a fight.
Speaking after he had addressed a conference in Milan, Steve Ballmer said: “We know what Yahoo is worth to us. We offered a lot of money: $44 billion. If their board thinks that’s fair, great. If not, we’ll move forward without a merger.”
Microsoft said that net income in the three months to March 31 fell to 47 cents a share, from 50 cents the year before, as revenues rose slightly from $14.39 to $14.45 billion.
The software maker added that profits during the current quarter, ending June 30, could just miss the consensus analyst forecast of 48 cents a share, predicting that they would come in at between 45 and 48 cents.
Shares fell $1.43 to $30.37 in extended trading at $31.80 at on the Nasdaq Stock Market, as investors reacted to Microsoft’s outlook for this quarter.
Meanwhile, although third-quarter revenues matched expectations, investors were also disappointed that they were not a little higher and concerned that sales of Microsoft’s Windows software package were not better.
Microsoft’s client division, which makes its Windows operating system, reported $4.03 billion in sales, down 24 per cent. The business division, which includes Office software, recorded a 1.7 per cent decline in sales to $4.75 billion.