The most important part of Yahoo’s report was that it extended its revenue-per-search agreement with Microsoft Corp. until March 2013. Sandler also said that had the deal expired at the end of its original March 2012 deadline, it could have cut Yahoo’s annual earnings by as much as $100 million.
Extending the Microsoft deal makes Yahoo “more attractive for potential buyers,” according to the analyst.
Steve Weinstein, of Pacific Crest Securities, said that since it appears the “overall fundamentals at Yahoo are trending roughly as expected,” it is likely that investors will keep their focus on the value of any potential acquisitions.
Weinstein estimates a price target of $21 a share for an acquirer to be reasonable.