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Sources: Yahoo Won't 'Blow The Lid Off' Earnings

It is, indeed, D-day for Jerry Yang and the Yahoo board. At 5 p.m. EST time today we will know a lot more about the Web giant's fate: If earnings are poor, Yahoo's bluff will have been called by Microsoft and the company will be assumed by the software giant for $31 per share. If earnings area strong, there's a slim chance that Yahoo could convince shareholders to remain independent, but only in the event of an AOL merger and/or an expanded Google search partnership. Microsoft could also be forced to up its bid, a move that many feel would instantly end the two-and-a-half month old takeover saga.

Sources close to the Sunnyvale, Calif. Web giant said that earnings will be strong, likely beating analysts' expectations of 9 cents per share on revenue of $1.32 billion, but the company "will not blow the lid off". The same people also said that partnerships with AOL and/or Google are unlikely to be announced today.

"We expect management to have pulled out all the stops to drive up Q1 performance, maximize their value, and make life generally as difficult/expensive for Microsoft as they can," Bernstein analyst Jeffrey Lindsay said in a research note yesterday. Meanwhile, Microsoft has said that if the standoff isn't resolved by Sunday, then the software giant would retract its offer and go directly to shareholders to try and unseat the Yahoo board.

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