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Blowing Q1 Would Be a Disaster for Yahoo

Blogger Henry Blodget raised new fears for Yahoo shareholders on Wednesday when he portended disaster if the company delivers poor first-quarter results. This would play directly into Microsoft's hands, he says, because if Yahoo blows the first quarter, Microsoft would pull its $44 billion offer, causing Yahoo's stock to collapse and shareholder lawsuits to flow. Once Yahoo hits rock bottom, Steve Ballmer and co. swoop in and buy the company for nearly half of its original offer.

Blodget says it's "certainly possible" that Yahoo delivers a weak first quarter: "The economy is tanking. AOL is sucking wind. Even Google appears to be having a rough go of it." Indeed, and these companies have only had the economy to worry about. Yahoo will have been worrying about Microsoft for more than half the first quarter--which can't be good for productivity. Says Blodget, "Yahoo is making it clear that its response to the Microsoft bid will be the same as its response to almost everything over the past 8 years: analysis paralysis."

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