Rumblings in the blogosphere yesterday suggested that Microsoft was preparing to up its $31 per share offer for Yahoo, but Microsoft sources on Tuesday said there are no plans to raise its bid,
originally worth $44.6 billion. However, such pronouncements are standard in deal negotiations.
This suggests Microsoft will bide its time until Yahoo delivers first-quarter earnings in a few weeks. Company strategists argue that Yahoo has failed to find a viable alternative or sufficiently convince investors that remaining independent is the best option for the future. They also feel the worsening economic situation could lower the value of Yahoo's stock even further, making Microsoft's original bid look all the sweeter.
Meanwhile, people close to Yahoo say the faltering Web giant is looking for an improved bid approaching $40 per share, although most industry watchers claim that if an improved bid comes it would be closer to $35 per share.