Tuesday, April 22, 2008

Yahoo reports a jump in profits

Yahoo, fending off a takeover bid from software giant Microsoft, said its profits tripled in the first three months of 2008.

The internet firm reported income of $542.2m (£271.5m) compared with $142.4m in the same period a year earlier.

Yahoo is seeking to prove it is worth more than Microsoft's unsolicited $44.6bn (£22.3bn) offer.

But despite beating forecasts, Yahoo's performance did not convince analysts that the firm merited a better bid.

"This is better than (Wall) Street was expecting. This might pose some issues for Microsoft," said Jeffrey Lindsay, analyst at Sanford C Bernstein & Co.

"It's less likely Microsoft would succeed with a lower bid. They wouldn't be able to reduce their price."

Perhaps these figures don't change the game much. Yahoo is still being backed into a corner by its giant unwelcome suitor, and nobody is rushing to its rescue.
Rory Cellan-Jones, BBC technology correspondent

Yahoo's profits were helped by a $401m gain from the sale of a stake in Chinese internet company Alibaba.com.

"Microsoft is breathing a sigh of relief. Even though these are solid results, given long and short term challenges, there's been no overall shift in Yahoo's business," said Jim Friedland, analyst at Cowen & Co.

'Open to all alternatives'

Yahoo chief executive and co-founder, Jerry Yang, said the firm remained opened to forging a deal with Microsoft but it is also continuing to explore other options.

"Our board and management team continue to be open to any and all alternatives, including a Microsoft deal," Mr Yang said.

Earlier Microsoft chief executive Steve Ballmer said the company will hold firm on its offer for Yahoo regardless of whether Yahoo's quarterly results impress or disappoint investors.

Microsoft has warned if its deal is not accepted by 26 April, it would mount a hostile takeover at a lower price.

To frustrate Microsoft's bid or extract a higher offer, Yahoo has sought to strike alliances with other firms.

Earlier this month, Yahoo announced a two-week experiment that will see the firm share advertising space with rival Google.

During the pilot, Google will be able to place ads alongside 3% of search results on Yahoo's website.

BBC

China shares down 50% from peak

Chinese investor looks at share price board
Chinese shares are worth half what they were in October

China's main share index, the Shanghai Composite Index, is trading 50% below the peak level reached in October 2007.

It ended the morning session at 3,022.6, which is 3% down on the day and less than half of its record close of 6,092.1, set on 16 October.

Concerns that government measures to control inflation could hit the profits of Chinese companies have been partly behind the drop.

The index had previously risen almost sixfold in two years.

The government has been taking steps to support share prices.

On Sunday, the China Securities Regulatory Commission announced restrictions on sales of certain shares.

Further measures are expected, including a possible reduction in the tax on share trading if the market keeps falling.

BBC

Clinton's poll day threat to Iran

Hillary Clinton has issued a stark warning to Iran, as Democrats in Pennsylvania vote to choose between her and Barack Obama to run for president.

She said the US would attack, and could "obliterate" Iran, if it launched a nuclear strike on Israel.

Mrs Clinton has been playing up foreign affairs and leadership as she tries to make up ground in the Democratic race.

She leads polls in Pennsylvania, the largest remaining state, but analysts say her hopes depend on a big victory.

A Zogby survey released on Tuesday showed Mrs Clinton leading Mr Obama by 10%, while an InsiderAdvantage poll had her 7% ahead.

Polling stations opened at 0700 (1100 GMT), with results expected soon after they close at 2000 (2400 GMT).

Hillary Clinton's threat to Iran

As the candidates appeared on the US talk show circuit on Tuesday morning, a row erupted when Mrs Clinton was asked how she would respond if Iran launched a nuclear attack on Israel.

She replied that: "If I'm the president, we will attack Iran... we would be able to totally obliterate them.

"That's a terrible thing to say, but those people who run Iran need to understand that, because that perhaps will deter them from doing something that would be reckless, foolish and tragic," she told TV channel ABC.

In response, Mr Obama said: "Using words like 'obliterate' - it doesn't actually produce good results, and so I'm not interested in sabre-rattling."

He said only that Iran should know he would respond "forcefully" to an attack on any US ally.

The US fears Iran is trying to acquire nuclear weapons, and could use them against Israel. Iran insists its nuclear programme is solely for power generation.

Mrs Clinton's tough talking over Iran is part of her strategy, to emphasise her foreign policy experience as she fights for every last vote available in Pennsylvania, says the BBC's Jack Izzard.

Last big state

With four million registered Democrats, and 158 pledged delegates to the Democratic Party's nominating convention in August, Pennsylvania is the last of the big states to hold a primary.

DEMOCRATIC DELEGATES
Barack Obama:
Pledged delegates: 1,415
Super-delegates: 233
Total: 1,648
Hillary Clinton:
Pledged delegates: 1,251
Super-delegates: 258
Total: 1,509
Source: AP estimates on 22 April

Although Mrs Clinton is behind in the delegate count and in the total votes cast, she has won most of the big state contests.

And the white working class voters who have formed the backbone of her support so far are a significant constituency in the state.

With the delegates split in proportion with the vote, neither candidate is expected to win sufficient pledged delegates to seal the nomination in the remaining primaries, and the two are courting 800 or so unelected "super-delegates".

Pennsylvania provides a key test for Mrs Clinton's argument - which she hopes will sway the super-delegates - that only she will be able to secure wins in critical large states come November's presidential election.

The BBC's North America editor, Justin Webb, says the state's voters have the power to keep Mrs Clinton's White House dream alive by giving her a substantial victory, to do it further damage by delivering a close result, or to destroy it by handing a win to Mr Obama.

Philadelphia residents discuss the Democratic presidential hopefuls

The Republican Party is also holding a primary in Pennsylvania on Tuesday, with presumptive nominee John McCain set to take all the delegates on offer.

On TV on Tuesday, Mrs Clinton predicted victory but insisted that the margin did not matter. Instead, she said, if Mr Obama failed to win it would call into question "his ability to win the big states".

Mr Obama conceded that his rival "has to be heavily favoured to win" in Pennsylvania, but dismissed the big-state argument, saying there was "no chance" of the Democrats losing New York or California in the presidential election, no matter who the candidate was.

'Politics of fear'

Even before the subject of Iran arose, foreign affairs loomed large in the final hours of campaigning, with the Obama camp accusing Mrs Clinton of trading in the "politics of fear".

Her final campaign advert featured shots of historic world events such as Pearl Harbour and the fall of the Berlin Wall, with clips of al-Qaeda leader Osama Bin Laden and Hurricane Katrina victims.

The advert concluded with the line: "You need to be ready for anything."

Mrs Clinton's chief strategist Geoff Garin said it was a positive advert.

"It states why Hillary Clinton is the right choice to be president," he said. "We're at a moment where we need a president who's got the strength and knowledge to take on very tough challenges."

But Bill Burton, from Mr Obama's team, said: "We already have a president who plays the politics of fear, and we don't need another."

BBC




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