According to numerous sources close to the situation and after regulatory pressure, Groupon will amend its S-1 public offering filing to remove references to an unusual accounting treatment that has attracted controversy.

Sources said the new filing by the social buying company, which is helmed by CEO and co-founder Andrew Mason (pictured above), will likely occur as early as Monday.

It can’t come a minute too soon regarding a metric called ACSOI, or adjusted consolidated segment operating income, which the Chicago-based Groupon used when it filed its S-1 documents in June.

As I wrote at the time about the odd use of ACSOI:

Let’s be clear, this is a number that does not include important costs, such as critical online marketing expenses to attract new customers to Groupon.

Such accounting is called non-GAAP (generally accepted accounting principles).

In 2010 and the first quarter of 2011, Groupon said its Adjusted CSOI was $60.6 million and $81.6 million, respectively.

On a GAAP basis, Groupon lost $413.4 million for 2010 and $113.9 million in the first three months of 2011.

And, indeed, questions from the media, investors and, most importantly, the Securities and Exchange Commission about how Groupon accounts for its revenue and profits using ACSOI were swift and decidedly negative.

Hence, a furious debate — along with much internal tension — within Groupon about what to do. At first, in another S-1 amendment, the company backed away from using ACSOI as a “valuation metric.”

But that was apparently not enough for the SEC or anyone else, so Groupon’s top managers finally thought it best to rid itself of the term entirely. That will happen next week, sources said.

And, in coming weeks, sources added, the company will be filing additional financial information about both its growth and costs, which will undoubtedly also be put under a microscope by the media, investors and regulators.

A Groupon spokesman declined to comment when asked about the removal of ACSOI from its public offering documents.

Earlier today, CNBC reported that the regulatory review of Groupon’s questionable use of certain accounting metrics in its IPO filing was delaying its offering until later in September.

While more questions from the Securities and Exchange Commission about how it accounts for its revenue and profits might indeed eventually push the IPO debut out, according to sources I have interviewed for months now, an offering in mid to late September was actually when the social buying company was planning to take its company public.

It makes sense, since August is seldom used for road shows for companies headed for an IPO — think Wall Street in the Hamptons and you’ll get why.

That said, the continued scrutiny by the SEC is not a welcome development for Chicago-based Groupon, which filed its S-1 documents in June.

In coming weeks, sources said, the company will be filing new financial information about both its growth and costs, which will undoubtedly be put under a microscope by investors and regulators.

That’s no surprise since the contents of the original filing immediately caused controversy, especially over the amount of its venture funding paid out to insiders and also over an unusual accounting treatment called adjusted consolidated segment operating income, or Adjusted CSOI.

As I wrote at the time:

Let’s be clear, this is a number that does not include important costs, such as critical online marketing expenses to attract new customers to Groupon.
Such accounting is called non-GAAP (generally accepted accounting principles).

In 2010 and the first quarter of 2011, Groupon said its Adjusted CSOI was $60.6 million and $81.6 million, respectively.

On a GAAP basis, Groupon lost $413.4 million million for 2010 and $113.9 million in the first three months of 2011.

Said Groupon about its accounting in its S-1 filing: “We believe Adjusted CSOI is an important measure of the performance of our business as it excludes expenses that are non-cash or otherwise not indicative of future operating expenses.”

Definitely sketchy enough to attract an SEC look-see, which caused Groupon to back away from Adjusted CSOI as a “valuation metric” in a recently amended S-1 filing. Groupon also stepped back a sloppy comment made after the filing by its Chairman Eric Lefkofsky — in a interview he apparently thought was off the record — that the company would be “wildly profitable.”

One thing is certain: There will surely be more amending of the Groupon S-1 in the weeks ahead as it stumbles toward its IPO, which will be one of the most prominent of the Web 2.0 era.

Demand Media, which posted its S-1 regulatory filing August, filed an amended version today that is likely to allow it to move quickly to an initial public offering.

The new version for the online content company has updated financial information for the third quarter.

Demand now must now wait for the Securities and Exchange Commission to approve the filing, after which the execs of the Santa Monica, Calif.-based Demand will immediately to go on a road show for several weeks to try to convince investors to jump on board.

Then, if there’s enough interest, the IPO is likely to come before the holidays.

Demand’s initial filing was to raise $125 million at a reported $1.5 billion valuation.

You can read the whole filing here, which shows an improved performance from Demand.

In its latest filing, Demand said it had generated revenue–from advertising and a domain business–of $179.4 million for the first nine months this year and had a net loss of $6.4 million.

In the same period a year ago, revenue was $102.3 with a net loss of $5.6 million.

Losses in the third quarter itself narrowed, to $305,000 from $4.2 million in the previous quarter and $1.9 million a year ago.

But Demand points in its filing to its “Adjusted OIBDA,” using less stringent non-GAAP financial rules, which shows a much improved $41.9 million profit compared to $18.9 million last year.

As MediaMemo’s Peter Kafka wrote:

Some investors may balk at these non-GAAP numbers, but Demand, Goldman Sachs and its other underwriters clearly think there’s a market for them. And there’s certainly a hunger in the tech world for a big, brand-name IPO to break the dry spell. You can feel people willing this thing to work.

If Demand did, say, $55 million in OIBDA this year, it would need a multiple of 18 times trailing 12 months earnings to get to a $1 billion valuation. It would need 27x to get the $1.5 billion number that people are whispering to reporters.

Another way to get to $1.5 billion: Project OIBDA of $100 million for 2011, and ask for 15x on that number.

Demand is definitely growing smartly from $170.3 million in annual revenue in 2008 to $198.5 in 2009 to possibly reaching–based on six months of 2010 results–well above $230 million in 2010.

That’s due to its increasing growth in traffic, largely via Demand’s popular eHow site and a network of others.

Almost all of the money is coming from traffic, and advertising, that it generates from Yahoo and Google–Google in particular.

Demand has done this using $355 million in funding it has raised since its founding in 2006. The company said it has only $29.2 million in cash and cash equivalents left, but there is also a $100 million untouched line of credit.

Hence, the IPO, which will give it both cash and stock to use to grow its content business, either organically or via acquisition, all while keeping the costs of content creation increasingly lower via innovative technology.

From Demand’s filings, it is clear such an effort is slow going, as it seeks to carve out any entirely new business model for content.

Now, it must find Wall Street investors who agree.

In its filing, Demand said it will sell 4.5 million shares in the IPO and current shareholders will sell another three million. It hopes to have DMD as its ticker symbol on the New York Stock Exchange.

But there is no price range yet for the offering, which is being led by Goldman Sachs and Morgan Stanley.

After news of the Demand Media IPO filing came out late last week, I was not that surprised to get an email from someone deeply involved in building an online content business.

“If they are worth over a billion with those financials, I can’t wait to find out what we are worth. What am I missing?”

Well, nothing actually, as Demand’s filing to raise $125 million in an initial public offering at a reported $1.5 billion valuation showed that making it big in the online content business was still slow going.

That said, Demand is surely going and, in fact, growing smartly from $170.3 million in revenue in 2008 to $198.5 in 2009 to possibly reaching–based on six months of 2010 results–well above $230 million in 2010.

That’s due to its increasing growth in traffic, largely via Demand’s popular eHow site and a network of others. According to the most recent numbers from comScore (SCOR), Demand’s properties make it the 17th-largest in the U.S., with 54.6 million unique monthly visitors.

But the media business at Demand is still small, relatively speaking to other big content companies, with the content and media part of the revenue representing almost 60 percent of the business (a domain registrar business makes up for the rest).

And, most importantly, it is still unprofitable.

The Santa Monica, Calif.-based start-up said that, for the six months ended June 30, the company posted a loss of $22.3 million on revenue of $114 million. It was an improvement over a loss of $28.9 million on revenue of $91.3 million in the same period of 2009.

Using less strict accounting, on an operating basis, the picture is better, with the company’s loss cut to $4.7 million from $12.3 million in the same six months.

And using even less stringent non-GAAP financial rules, called, “Adjusted OIBDA,” Demand said in its regulatory filing with the Securities and Exchange Commission Friday that it made $25.6 million in profits.

As MediaMemo’s Peter Kafka wrote over the weekend:

Some investors may balk at these non-GAAP numbers, but Demand, Goldman Sachs (GS) and its other underwriters clearly think there’s a market for them. And there’s certainly a hunger in the tech world for a big, brand-name IPO to break the dry spell. You can feel people willing this thing to work.

If Demand did, say, $55 million in OIBDA this year, it would need a multiple of 18 times trailing 12 months earnings to get to a $1 billion valuation. It would need 27x to get the $1.5 billion number that people are whispering to reporters.

Another way to get to $1.5 billion: Project OIBDA of $100 million for 2011, and ask for 15x on that number.

That’s a good thing since Demand, which has raised $355 million in funding since its founding in 2006, has only $33.6 million in cash left in its kitty–probably plenty to keep going–but it’s likely to need more investment to crossover to where it would not need any more money. (There is a $100 million untouched line of credit, but Demand is unlikely to want to dip into that right now.)

Hence, the IPO, which will give it both cash and stock to use to grow itself, either organically or via acquisition, all while keeping the costs of content creation lower and lower via innovative technology.

For Demand CEO Richard Rosenblatt–who has a series of notable financial wins so far, selling such Internet properties such as iMall and MySpace for big windfalls–it will be interesting to see if he can build the business for the long term, which he has said is his intent.

He might want to pay attention to the travails of AOL (AOL) CEO Tim Armstrong, who has plotted a very similar course in the content arena in order to turn around the long-suffering Internet icon.

The former Google (GOOG) exec is facing strong headwinds in doing so, with his legacy subscription access business dying faster than expected, while his advertising revenue remains frustratingly flat.

Armstrong has his hands full building up that content business while also fixing all the various maladies of AOL’s past.

Last week, in AOL’s most recent quarterly report, that was eminently clear, with revenue and earnings below already low Wall Street expectations.

“Nobody likes to show up to these calls and report down numbers in an up market,” said Armstrong in the investor call after the results were released, noting that AOL was in the midst of a long turnaround and “eventually” investors would be able to see results.

Eventually is a good way to put it.

Yahoo said it had earned 15 cents a share in net income–a rise of 53 percent compared to last year-in its second-quarters earnings today, after the markets closed, on an only slight rise in revenue.

Wall Street had expected the Internet giant to earn 14 cents a share in the three months.

But gross revenue at the Silicon Valley Internet giant rose only two percent, And minus costs associated with traffic acquisition–called non-GAAP revenue–revenue was only $1.128 billion compared to $1.136 billion a year ago.

Yahoo (YHOO) CEO Carol Bartz has been touting improved margins and stronger operating income over longer-term worries about lack of innovative vision.

But the lack of revenue growth is the real issue.

Most encouraging: Display advertising, Yahoo’s core business, grew 19 percent from a year ago.

But revenue from owned-and-operated search declined yet again, although less dramatically, down eight percent year-over-year.

Page views were also down four percent, according to Yahoo, while employee numbers rose eight percent.

Here’s the full press release (and click here to see Yahoo’s slides on the earnings and here to read the liveblog of the management call on the results):

YHOO_Q210PressRelease_Final

Analysts had been expecting $1.06 a share on $30 billion in revenue.

All in all, a strong quarter. PC shipments grew 26 percent year-over year. Server revenue rose 11 percent. And Personal Systems Group revenue was up 20 percent.

Looking ahead to its second quarter, HP (HPQ) expects non-GAAP earnings-per-share of $1.03 to $1.05 on revenue of $29.4 billion to $29.7 billion. The company also raised its revenue outlook for fiscal 2010 to between $121.5 billion and $122.5 billion from an earlier forecast of $118 billion to $119 billion.

“HP is well-positioned to outperform the market,” HP CEO Mark Hurd said in a statement. “The strength of our portfolio, leaner cost structure and accelerating market momentum give us the confidence to raise our full-year outlook.”

The second-quarter loss Palm reported Thursday afternoon was narrower than the one it reported last year, but still fell far short of what Wall Street had been expecting. The smartphone maker lost 37 cents a share for the period on sales of $302 million. Analysts had been expecting a net loss of 32 cents per share on revenue of $266.2 million.

Palm (PALM) did manage to ship a total of 783,000 smartphone units during the quarter, though, a five percent decrease from last quarter, but a year-over-year increase of 41 percent. That said, the company actually sold only 573,000 units, down 29 percent from the previous quarter and down four percent year-over-year. Seems the launch of the Pixi wasn’t quite as successful as Palm had hoped.

“We are continuing to execute strongly against our long-term strategy with the delivery of Palm Pixi, the new carrier launches completed this quarter, and the upcoming opening of Palm’s full developer program,” said Jon Rubinstein, Palm’s chairman and chief executive officer.

“We’re still in the early stages of a long race,” Rubinstein added, “and we’re energized by the opportunity to compete in this exciting market. We remain confident that Palm’s innovative product design capabilities, integrated cloud services and the differentiated and delightful Palm webOS experience will provide the foundation for our sustained success.”

Once again, Palm did not break out unit sales of the Pre or Pixi in its earnings release, below. At $11.26, Palm shares are down 3.92 percent in after-hours trading.

Palm Reports Q2 FY 2010 Results

SUNNYVALE, Calif.– Palm, Inc. (NASDAQ: PALM) today reported that total revenues in the second quarter of fiscal year 2010, ended Nov. 27, 2009, were $78.1 million. Gross profit was $5.5 million, and gross margin was 7.0 percent. These results include the effects of subscription accounting applied to Palm(R) webOS(TM) products as required by GAAP.(1) In accordance with this methodology, revenues and direct cost of revenues for Palm webOS products (currently Palm Pre(TM) and Palm Pixi(TM) smartphones) are deferred and recognized over the products’ estimated economic lives.

To facilitate comparisons to Palm’s historical results, Palm has included non-GAAP adjusted measures, which exclude the impact of subscription accounting, stock-based compensation and other items detailed later in this release. The company believes this information will help investors better evaluate its current period performance and trends in its business.

Non-GAAP Adjusted Revenues in the second quarter totaled $302.0 million, non-GAAP Adjusted Gross Profit was $77.3 million and non-GAAP Adjusted Gross Margin was 25.6 percent.

“We are continuing to execute strongly against our long-term strategy with the delivery of Palm Pixi, the new carrier launches completed this quarter, and the upcoming opening of Palm’s full developer program,” said Jon Rubinstein, Palm’s chairman and chief executive officer. “We’re still in the early stages of a long race, and we’re energized by the opportunity to compete in this exciting market. We remain confident that Palm’s innovative product design capabilities, integrated cloud services and the differentiated and delightful Palm webOS experience will provide the foundation for our sustained success.”

The company shipped a total of 783,000 smartphone units during the quarter, representing a 5 percent decrease from the first quarter of fiscal year 2010 and a year-over-year increase of 41 percent compared to the second quarter of fiscal year 2009. Smartphone sell-through for the second quarter was 573,000 units, down 29 percent from the first quarter of fiscal year 2010 and down 4 percent year-over-year.

On a GAAP basis, net loss applicable to common stockholders for the second quarter of fiscal year 2010 was $(85.4) million, or $(0.54) per diluted common share. This compares to a net loss applicable to common stockholders for the second quarter of fiscal year 2009 of $(508.6) million or $(4.64) per diluted common share. The company’s second quarter of fiscal year 2009 results included a non-cash charge with a net impact of $396.7 million to the tax provision pertaining to the increase of the valuation allowance for the Company’s U.S. deferred tax assets.

The company’s net loss applicable to common stockholders on a GAAP basis reflects accounting guidance, effective in the first quarter of fiscal year 2010, which requires the anti-dilutive provisions of Palm’s series C preferred shares and related warrants to be treated as derivatives for financial reporting purposes. The fair value of the derivatives were estimated as of the first day of fiscal year 2010 and are marked to market on a quarterly basis, with any change in value reflected in the company’s financial results for the period. The series C derivatives balance was $178.7 million at the end of the second quarter of fiscal year 2010 compared to $235.0 million at the end of the first quarter of fiscal year 2010. This reduction in fair value resulted in a $56.3 million non-cash gain on series C derivatives and was reflected in the company’s second quarter GAAP financial results. With regard to the series C derivatives, any future increases in Palm’s stock price from period to period will be reflected as a non-cash loss on these derivatives in the company’s financial results, and any future decreases will be reflected as a non-cash gain in the company’s financial results.

Non-GAAP Net Loss for the second quarter of fiscal year 2010 was $(59.6) million, or $(0.37) per diluted share. This compares to a non-GAAP Net Loss for the second quarter of fiscal year 2009 of $(80.2) million, or $(0.73) per diluted share.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the second quarter of fiscal year 2010 totaled $(70.1) million. EBITDA, adjusted to exclude the impact of subscription accounting, stock-based compensation, net other income (expense), restructuring charges and a gain on series C derivatives, or Adjusted EBITDA, totaled $(48.3) million.

The company’s cash, cash equivalents and short-term investments balance was $590.0 million at the end of the second quarter of fiscal year 2010. This includes net proceeds of approximately $360 million from the company’s public equity offering, which closed on Sept. 23, 2009. Cash from operations for the second quarter of fiscal year 2010 was $16.7 million.

Palm may periodically provide new software features free of charge to customers of its Palm webOS products and currently recognizes Palm webOS product revenues and related standard cost of revenues on a subscription basis based on the applicable product’s estimated economic life, which is currently 24 months. The company records deferred revenues and deferred cost of revenues on its balance sheet, and amortizes them into earnings on a straight-line basis over the estimated economic product life.

Palm announced today that it expects to early adopt two recently released accounting standards related to revenue recognition, Accounting Standards Update (“ASU”) No. 2009-13 and ASU No. 2009-14, effective for its third quarter of fiscal year 2010. These accounting changes will result in a substantial portion of Palm webOS product revenues being recognized upon delivery. The remaining Palm webOS revenues, which are related to future services and deliverables, will be recorded as deferred revenues on the company’s balance sheet, and amortized into earnings on a straight-line basis over the estimated economic product life, which is currently 24 months. Under the new standards, all related cost of revenues will be recognized upon delivery. This change in accounting will reduce the amount of revenues that Palm will defer on its balance sheet but will have no impact on cash flows and does not change how Palm accounts for Palm OS(R) products, like the Centro(TM), or its Treo(TM) line. Consistent with the company’s past practice, Palm will continue to provide non-GAAP, adjusted measures that exclude the impact of deferred revenue accounting, stock-based compensation and other items as appropriate.

The acquisition, which has been approved by both companies’ boards, should bolster HP’s data center strategy and, thanks to 3Com’s routing business, intensify competition with rival Cisco (CSCO), which has lately been expanding into HP’s businesses.

“Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor,” Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP, said in a statement.

“By acquiring 3Com,” Donatelli added, “we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center.”

Below, the official release:

HP to Acquire 3Com for $2.7 Billion
Will create networking industry powerhouse with a proven, edge-to-data center set of solutions and global reach

PALO ALTO, Calif., and MARLBOROUGH, Mass., Nov. 11, 2009

HP and 3Com Corporation (NASDAQ: COMS) (“3Com”) today announced that they have entered into a definitive agreement under which HP will purchase 3Com, a leading provider of networking switching, routing and security solutions, at a price of $7.90 per share in cash or an enterprise value of approximately $2.7 billion. The terms of the transaction have been approved by the HP and 3Com boards of directors.

This combination will transform the networking industry and underscore HP’s next-generation data center strategy built on the convergence of servers, storage, networking, management, facilities and services. The resulting business outcome will help customers simplify the network, deploy a unique and innovative edge-to-core network fabric for the enterprise and improve IT service delivery capabilities, all delivered with best-in-class price-performance.

“Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor,” said Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP. “By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center.”

“Our extensive product line and innovative technology together with HP’s breadth and scale will expand our global opportunity,” said Bob Mao, chief executive officer, 3Com. “3Com’s networking products are based on a modern architecture which has been designed to offer better performance, require less power and eliminate administrative complexity when compared against current network offerings. Our products are enterprise proven and widely deployed in the world’s largest banks, manufacturers, Internet service providers, public utilities and retailers.”

The acquisition of 3Com will dramatically expand HP’s Ethernet switching offerings, add routing solutions and significantly strengthen the company’s position in China–one of the world’s fastest-growing markets–via the H3C offerings. In addition, the combination will add a large and talented research and development team in China that will drive the acceleration of innovations to HP’s networking solutions.

3Com also brings to HP best-of-breed network security capabilities through its TippingPoint portfolio. For the past four years, TippingPoint has been the leader in Gartner’s “Magic Quadrant” in its evaluation of leading network security products. Approximately 30 percent of the Fortune 1000 companies have already deployed TippingPoint intrusion prevention systems.

“We are confident that we can run our entire global business of 300,000-plus employees, including our next-generation data centers, entirely on the new HP networking solutions,” said Randy Mott, executive vice president and chief information officer, HP. “Based on our experience and extensive testing of 3Com’s products, we are planning to undertake a global rollout within HP as soon as possible after the completion of the acquisition.”

Under the terms of the merger agreement, 3Com stockholders will receive $7.90 for each share of 3Com common stock that they hold at the closing of the merger. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of 3Com’s stockholders. The transaction is expected to close in the first half of calendar 2010.

HP anticipates that the transaction will be slightly dilutive to fiscal 2010 non-GAAP earnings.

For its fiscal first quarter, Oracle’s net income rose to $1.1 billion, or 22 cents a share, from $1 billion, or 21 cents a share in the same period last year. Revenue for the period ended in August fell five percent to $5.1 billion. Excluding special items, earnings for the quarter would have been 30 cents a share. Analysts polled by Thomson Reuters had been expecting earnings, excluding items, of 30 cents a share, and $5.2 billion in revenue.

“By substantially improving operating margins we were able to increase Q1 earnings per share even though revenues decreased slightly,” Safra Catz, Oracle’s president, said in a statement. “We grew non-GAAP operating margins by 570 basis points to 46 percent in our seasonally smallest quarter. Our operating model continues to drive earnings for our stockholders.”

Yeah, but good luck trying to tell them that. Shares of Oracle (ORCL) have fallen more than three percent to $21.42 in after-hours trading following the earnings announcement.

In a research note issued this morning, Bernstein analyst Toni Sacconaghi wondered whether Oracle (ORCL) might even consider walking away from the deal, though he ultimately concluded that it was unlikely.

“Given ORCL’s repeated and strident commentary, it appears very unlikely that it will walk away from the deal, although it would not face a break-up fee if it did (unlike Sun, which faces a $260+ million break-up fee),” he wrote. “We continue to believe that the JAVA-ORCL deal is very likely to close, but it will be interesting to see if Oracle’s conviction level waivers at all on its earnings call today.”

Indeed. Certainly, there are plenty of reasons to think that it might. For one thing, notes Sacconaghi, Sun’s (JAVA) recent financials are going to make it difficult for for Oracle to hit its promised $1.5 billion in first-year accretion profits.

“Our forecast now calls for [Sun] to be barely break even on a non-GAAP basis next year,” Sacconaghi says, adding that earnings are likely to be nearly $900 million less than he modeled when the deal was first announced. “Accordingly, assuming no material revenue synergies, our analysis suggests that in order to hit its $1.5B accretion target, Oracle may need to reduce Sun’s workforce by 15,000, which represents over 50 percent of Sun’s current headcount and appears implausible.”

So Oracle could hit its aggressive Year One accretion targets. It would just have to gut Sun to do it.

One last point worth noting here. Sacconaghi seems confident the European Union will ultimately approve Oracle’s acquisition of Sun, though possibly with conditions around mySQL. But he thinks approval will take time. And the longer it takes, the worse it will be for Sun, whose business is already suffering from the uncertainty surrounding it.

“…The EU took an average of 140 days between the time that a Phase II [review] was announced and a merger was ultimately approved,” he explains. “Given that Phase II for the JAVA deal was announced on September 3rd, this implies a January date for resolution, and would require JAVA to go through another two full quarters as a standalone company. With uncertainty around the ORCL deal already weighing on JAVA, this suggests the potential for further erosion in Sun’s financials.”

The company says revenue for the quarter will fall between $2.58 to $2.68 billion–down from $3.7 billion a year ago and well under the $3.03 billion for which analysts have been calling. And it expects a loss of six cents to 16 cents per share on a non-GAAP basis. That’s pretty ugly when First Call consensus has been predicting a loss of a penny per share.

What was it Oracle wants with Sun, again?

Sun (JAVA) shareholders are set to vote on the Oracle (ORCL) acquisition this Thursday.

But investors are going to be pleased with the non-GAAP earnings number: $5.16 share, up from $5.10 per share in the previous quarter and way, way above the $4.90 per share consensus. Bottom line: Google (GOOG) has cut back on its expenditures, and that’s boosted profits.

Here’s how: “Operating expenses, other than cost of revenues, were $1.52 billion in the first quarter of 2009, or 28% of revenues, compared to $1.65 billion in the fourth quarter of 2008, or 29% of revenues. The operating expenses in the first quarter of 2009 included $774 million in payroll-related and facilities expenses, compared to $890 million in the fourth quarter of 2008.”

And here’s one way to keep “payroll-related expenses” down: Stop hiring people. “On a worldwide basis, Google employed 20,164 full-time employees as of March 31, 2009, down from 20,222 full-time employees as of December 31, 2008.”

Meanwhile, Google is still moving its sales team around following Tim Armstrong’s departure.

Earnings call starting now. I’ll update as we go.

Google CEO Eric Schmidt: “We’re still basically in uncharted territory… users are still searching, but they’re buying less… advertisers are still spending, but they’re spending less.” That’s all appropriate, he says. Google’s auction model is working. Ad dollars are still moving from offline to online.

Apologies: I now have three Google stories breaking simultaneously, and I’m going to have to duck in and out of the live call.

Sorry for the gap. Here’s Schmidt talking about getting long-form content on YouTube: Initial focus will be on advertising, but will add in micropayments and other schemes down the line. Will be announcing additional things in that area “literally very very soon.”

Schmidt asked about Twitter: “It proves that innovation is alive and well in Silicon Valley… it is an incredibly useful thing. The question here is how would you make some money on that… and the logical conclusion would be advertising, and we’d happy to work on that with them.”

For the first quarter, the company posted revenue of 9.276 billion euros, down 26.7 percent year over year, and 26.8 percent sequentially. Revenues from the device business were down 33.4 percent year over year, and 24.2 percent from Q4. The Nokia Siemens equipment business was down 12.1 percent versus a year ago, and 31.1 percent sequentially.

Profits in the quarter on a non-IFRS basis (the equivalent of non-GAAP) were 10 euro cents per share, versus 39 cents a year ago.

Read the rest of this post on the original site

The fourth was Yahoo’s first money-losing quarter since 2002, and the first time its revenue declined since the fourth quarter of 2001.

Said incoming CEO Carol Bartz, “The company also made important investments while aggressively managing costs, leaving us better positioned to weather the economic downturn and emerge stronger when advertiser spending improves. We have work to do, but I am excited by Yahoo!’s opportunities, and encouraged by the tremendous innovation and momentum I’ve seen since joining the company as CEO.”

Here’s the official release:

Yahoo! Reports Fourth Quarter and Full Year 2008 Financial Results

“Despite the challenging economic environment, Yahoo! delivered adjusted operating cash flow above the midpoint of guidance for the fourth quarter,” said Yahoo! Chief Executive Officer Carol Bartz. “The company also made important investments while aggressively managing costs, leaving us better positioned to weather the economic downturn and emerge stronger when advertiser spending improves. We have work to do, but I am excited by Yahoo!’s opportunities, and encouraged by the tremendous innovation and momentum I’ve seen since joining the company as CEO.”

Fourth Quarter 2008 Financial Results

• Revenues were $1,806 million for the fourth quarter of 2008, a 1 percent decrease compared to $1,832 million for the same period of 2007.
• Marketing services revenues were $1,594 million for the fourth quarter of 2008 compared to $1,590 million for the same period of 2007.
• Marketing services revenues from Owned and Operated sites were $1,063 million for the fourth quarter of 2008, a 3 percent increase compared to $1,035 million for the same period of 2007.
• Marketing services revenues from Affiliate sites were $531 million for the fourth quarter of 2008, a 4 percent decrease compared to $555 million for the same period of 2007.
• Fees revenues were $212 million for the fourth quarter of 2008, a 12 percent decrease compared to $242 million for the same period of 2007.
• Revenues excluding traffic acquisition costs (“TAC”) were $1,375 million for the fourth quarter of 2008, a 2 percent decrease compared to $1,403 million for the same period of 2007.
• Operating loss for the fourth quarter of 2008 was $278 million compared to operating income of $191 million for the same period of 2007.
• Operating loss before depreciation, amortization, and stock-based compensation expense for the fourth quarter of 2008 was $60 million compared to operating income before depreciation, amortization, and stock-based compensation expense of $527 million for the same period of 2007.
• Adjusted operating income before depreciation, amortization, and stock-based compensation expense for the fourth quarter of 2008 was $542 million, excluding restructuring charges of $108 million for severance, facilities, and other restructuring costs; a goodwill impairment charge of $488 million related to our international segment; and incremental costs of $7 million incurred for outside advisors related to Microsoft’s proposals to acquire all or a part of the Company, other strategic alternatives, including the Google agreement, the proxy contest, and related litigation defense (collectively, the “strategic alternatives and related matters”).
• Cash flow from operating activities for the fourth quarter of 2008 was $321 million, a 48 percent decrease compared to $622 million for the same period of 2007.
• Free cash flow for the fourth quarter of 2008 was $219 million, a 34 percent decrease compared to $330 million for the same period of 2007.
• Net loss for the fourth quarter of 2008 was $303 million or $0.22 per diluted share compared to net income of $206 million or $0.15 per diluted share for the same period of 2007.
• Non-GAAP net income for the fourth quarter of 2008 was $238 million or $0.17 per diluted share compared to non-GAAP net income of $184 million or $0.13 per diluted share for the same period of 2007.

PREVIOUSLY:

• Carol Bartz: The ALL CAPS CEO
• Yahoo Investors: We Would Have Preferred Steve Jobs…

The fourth was Yahoo’s first money-losing quarter since 2002, and the first time its revenue declined since the fourth quarter of 2001.

Said incoming CEO Carol Bartz, “The company also made important investments while aggressively managing costs, leaving us better positioned to weather the economic downturn and emerge stronger when advertiser spending improves. We have work to do, but I am excited by Yahoo!’s opportunities, and encouraged by the tremendous innovation and momentum I’ve seen since joining the company as CEO.”

Here’s the official release:

Yahoo! Reports Fourth Quarter and Full Year 2008 Financial Results

“Despite the challenging economic environment, Yahoo! delivered adjusted operating cash flow above the midpoint of guidance for the fourth quarter,” said Yahoo! Chief Executive Officer Carol Bartz. “The company also made important investments while aggressively managing costs, leaving us better positioned to weather the economic downturn and emerge stronger when advertiser spending improves. We have work to do, but I am excited by Yahoo!’s opportunities, and encouraged by the tremendous innovation and momentum I’ve seen since joining the company as CEO.”

Fourth Quarter 2008 Financial Results

• Revenues were $1,806 million for the fourth quarter of 2008, a 1 percent decrease compared to $1,832 million for the same period of 2007.
• Marketing services revenues were $1,594 million for the fourth quarter of 2008 compared to $1,590 million for the same period of 2007.
• Marketing services revenues from Owned and Operated sites were $1,063 million for the fourth quarter of 2008, a 3 percent increase compared to $1,035 million for the same period of 2007.
• Marketing services revenues from Affiliate sites were $531 million for the fourth quarter of 2008, a 4 percent decrease compared to $555 million for the same period of 2007.
• Fees revenues were $212 million for the fourth quarter of 2008, a 12 percent decrease compared to $242 million for the same period of 2007.
• Revenues excluding traffic acquisition costs (“TAC”) were $1,375 million for the fourth quarter of 2008, a 2 percent decrease compared to $1,403 million for the same period of 2007.
• Operating loss for the fourth quarter of 2008 was $278 million compared to operating income of $191 million for the same period of 2007.
• Operating loss before depreciation, amortization, and stock-based compensation expense for the fourth quarter of 2008 was $60 million compared to operating income before depreciation, amortization, and stock-based compensation expense of $527 million for the same period of 2007.
• Adjusted operating income before depreciation, amortization, and stock-based compensation expense for the fourth quarter of 2008 was $542 million, excluding restructuring charges of $108 million for severance, facilities, and other restructuring costs; a goodwill impairment charge of $488 million related to our international segment; and incremental costs of $7 million incurred for outside advisors related to Microsoft’s proposals to acquire all or a part of the Company, other strategic alternatives, including the Google agreement, the proxy contest, and related litigation defense (collectively, the “strategic alternatives and related matters”).
• Cash flow from operating activities for the fourth quarter of 2008 was $321 million, a 48 percent decrease compared to $622 million for the same period of 2007.
• Free cash flow for the fourth quarter of 2008 was $219 million, a 34 percent decrease compared to $330 million for the same period of 2007.
• Net loss for the fourth quarter of 2008 was $303 million or $0.22 per diluted share compared to net income of $206 million or $0.15 per diluted share for the same period of 2007.
• Non-GAAP net income for the fourth quarter of 2008 was $238 million or $0.17 per diluted share compared to non-GAAP net income of $184 million or $0.13 per diluted share for the same period of 2007.

PREVIOUSLY:

• Carol Bartz: The ALL CAPS CEO
• Yahoo Investors: We Would Have Preferred Steve Jobs…

For the quarter, the company posted revenue of $67.0 million and non-GAAP EPS of 36 cents; the Street had expected $66.85 million and 35 cents.

For Q3, the company sees revenue of $63 million to $65 million, with non-GAAP profits of 30-36 cents a share; the Street had been expecting $63 million and 32 cents. For the full year ending in November, the company sees revenue of $263 million to $275 million, with profits of $1.50 to $1.70; the Street consensus has been $269.1 million and $1.54.

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