SAN FRANCISCO (AP) -- Yahoo Inc.'s first-quarter performance was a little like Goldilocks' favorite soup - not too hot and not too cold, and that has set the table for a bitter battle over Microsoft Corp.'s bid to take over the Internet pioneer.
By delivering earnings and revenue Tuesday that surpassed analysts' estimates, Yahoo added credence to its board's contention that the Sunnyvale-based company is poised for a dramatic turnaround that justifies a higher sales price than Microsoft's initial bid of $44.6 billion, or $31 per share.
But neither the first-quarter results nor Yahoo's outlook for the rest of the year may be compelling enough to cause Microsoft to sweeten its offer.
"This isn't going to make Microsoft come and out offer $35," predicted Canaccord Adams analyst Colin Gillis.
That leaves the rivals at an impasse, just as they have been since Microsoft stunned Yahoo with its unsolicited takeover attempt nearly three months ago.