Yesterday Yahoo reported Q1 earnings that beat Wall Street expectations, suggesting Microsoft's $44.6 billion takeover bid does indeed undervalue the company.

Odds are high that Microsoft will buy it anyway.

Yahoo's revenue totaled $1.82 billion in the first quarter of 2008, down to $1.35 billion after ad partners were paid. Earnings hit $542.2 million — three times higher than 1Q07 earnings of $142.4 million.

The improvement stemmed mainly from a $401 million non-cash gain representing Yahoo's stake in the parent company of Alibaba.com, reports the Associated Press. Subtracting that one-time swell reduces earnings to $141 million, slightly lower than 2007's numbers.

The figures, combined with its decision not to raise its revenue outlook for the rest of the year, leaves Yahoo vulnerable to Microsoft's aggressive acquisition stance.

Before Yahoo's earnings were announced, Microsoft CEO Steve Ballmer stated the news would not alter its acquisition strategy, CNet reports. Yahoo has until Saturday to approve the buyout offer. If it fails to do so, Microsoft shall attempt to oust the board.