Yahoo Inc. has released a rosy outlook for the next two years, hoping to give investors a better understanding of why the Internet pioneer isn't willing to sell to Microsoft Corp. unless its suitor raises its bid above $45 billion.Analysts interpreted Tuesday's unscheduled disclosure of Yahoo's internal projections as a sign that the Sunnyvale-based company's attempts to find an alternative deal to Microsoft's 6 1/2-week-old offer aren't bearing fruit. With its options narrowing, Yahoo appears determined to remain independent unless Redmond, Wash.-based Microsoft boosts its unsolicited bid, originally valued at $44.6 billion, or $31 per share. Microsoft so far hasn't wavered from the offer, which it has described as fair.



But the two sides signaled they might be ready to negotiate last week when senior executives from Yahoo and Microsoft held their first face-to-face meeting in Silicon Valley. No investment bankers attended that icebreaker.

Stanford Group analyst Clayton Moran called the release of Yahoo's revenue forecasts through 2010 "another step in the public negotiation between these two companies. We believe this deal is turning friendly."

Yahoo's move appeared to hearten investors as the company's shares rose $1.70, nearly 7 percent, to $27.55 during Tuesday's afternoon trading.

As the company warned in late January just before Microsoft made its bid, Yahoo has modest growth expectations this year after a streak of declining profits in 2006 and 2007.

Yahoo still anticipates its revenue, after subtracting advertising commissions, to total $5.7 billion this year, in line with analyst expectations.

But Yahoo assured investors its plans to grab a bigger piece of the online advertising market will kick into high gear after this year, with revenue climbing by about 25 percent in 2009 and 2010. By 2010, Yahoo projects its revenue, after ad commissions, will total about $8.8 billion, more than 70 percent above 2007.

"Yahoo is positioned for accelerated financial growth — we have a powerful consumer brand, a huge global audience and a highly profitable operating model," said co-founder Jerry Yang who has been trying to engineer a turnaround since he replaced Terry Semel as the company's chief executive nine months ago.

Messages left with a Microsoft spokesman weren't immediately returned.

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