Earnings Could Sweeten Microsoft Bid For Yahoo

Sunnyvale, CA (AHN) - Financial results of Yahoo! Inc. to be disclosed Tuesday could sweeten Microsoft's bid for the Internet company, analysts said.

In February, Yahoo rejected Microsoft's $44.6 billion bid, saying the $31 a share offer undervalued the second most-widely used search engine.

A favorable first-quarter report would give Yahoo leverage in its discussions with Microsoft , the Los Angeles Times said. A deadline for accepting Microsoft's bid expires Saturday.

Analysts estimate that Yahoo sales, excluding revenue passed on to partner sites, may reach $1.32 billion, up 12 percent, according to Bloomberg. If Yahoo declines, it may face a hostile takeover fight and risk a lower bid.