Chapter 450 of the Microhoo saga: Yahoo's defense hinges on first quarter

Welcome to our latest installment of the Microsoft-Yahoo saga. In this part, we see Yahoo stretch to deliver a good first quarter. Meanwhile, Microsoft circles above hoping Yahoo's quarter will stink so it can get a great price.

We pick up the scene with Yahoo CEO Jerry Yang, the man with the desire to fend of Microsoft's $44.6 billion bid and no real ammo. One of his last bullets is a strong second quarter so he can make the case that Yahoo is worth more.

Where will the screenwriters take this tale?

Kara Swisher notes that Yahoo's nightmare scenario is a first quarter debacle that whacks the stock. A bad quarter isn't that far fetched. Google has a cold. AOL is AOL, but is still open to talking to Yahoo. And the economy is sucking wind. Can Yahoo really rise above all of that?

For the record, Yahoo is expected to report earnings of 11 cents a share for the March quarter on sales of $1.32 billion, according to Thomson Financial. Those estimates can change in the more than a month to go before Yahoo's earnings report.

As noted previously, Microsoft could theoretically walk away from Yahoo--at least for a bit. If Yahoo misses estimates, Microsoft walks away, Yahoo stock tanks then CEO Steve Ballmer comes in with a lower offer. Capitalism ain't pretty. And with a looming proxy war put off indefinitely Microsoft can take its time.

Yahoo is almost out of Hail Mary passes. The second quarter results may be one last heave down the field.