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Can Yahoo Deliver with its Detailed Financial Plan for 2008?

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Can Yahoo Deliver with its Detailed Financial Plan for 2008?

If there is one company that should be reading Yahoo’s 2008 financial plan, it’s got to be Microsoft. The detailed financial plan for 2008 which was submitted by Yahoo to investors fully supports its claim that Microsoft has undervalued Yahoo’s worth when Microsoft submitted a $45 billion bid.

The detailed financial plan outlined Yahoo’s strategic direction for this year, which includes doubling operating cash flow over the next three years from $1.9 billion to $3.7 billion. Yahoo is also aiming to generate $8.8 billion in revenue excluding traffic acquisition costs by 2010.

The detailed financial plan highlighted two key strategies that Yahoo is vent on undertaking for the rest of the current year, pending of course the final outcome of the Microsoft bid. The two key highlights are:

1. Starting Point – To enhance Yahoo’s current strong position as the leading starting point for Internet users. To achieve this, Yahoo will to improve the relevance of its various web products and services that includes Yahoo.com portal, My Yahoo, Yahoo Search, Yahoo Mail and Yahoo mobile to the users. Likewise, Yahoo will continue to make these services as open and social as possible.

2. Must buy – Yahoo would make it easier for advertisers, agencies, publishers and ad networks to do business with Yahoo and with one another. Yahoo will develop a new ad platform that would simplify the process of buying and selling online advertising. Yahoo will enhance its Panama search advertising platform. Likewise, Yahoo would also continue serving sponsored search advertising to its current partners which includes Right Media.

The financial plan also noted Yahoo’s strategic assets in Asia which includes Yahoo! Japan, Alibaba Group and Gmarket as proofs of its strong cash position and significant equity value. Possible to further emphasize that the company is more than what Microsoft sees it financially.
Incidentally, the financial plan was prepared before Microsoft announced its bid to acquire Yahoo. So, whether Yahoo’s plan would push through or not, still depends on the outcome of Microsoft’s takeover bid.

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Arnold Zafra

Arnold Zafra writes daily on the announcements by Google, Ask.com, Yahoo & MSN along with how these announcements effect web ... [Read full bio]

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