Filed under: Microsoft, Yahoo!
Maybe Microsoft is serious about buying Yahoo! after all
It looks like the acquisition talks between Microsoft and Yahoo! are back on. The other day we were picking on Microsoft for setting an ultimatum, and then letting it pass with no real consequences. But the New York Times reports that there's probably a good reason Microsoft hasn't followed through with their threat to replace Yahoo!'s board: the company actually think it can hammer out a peaceful agreement.
Sources close to the deal are saying that Microsoft is willing to raise its bid to about $33 a share. That's less than the $37 a share some Yahoo! shareholders are hoping for, but significantly higher than the $29 a share Microsoft is currently offering. If this all sounds like the two companies are squabbling over just a few bucks, keep this in mind: Every $1 per share increase raises the value of the transaction by about $1.4 billion.
It's still totally possible that this deal could fall through. Microsoft's Steve Ballmer says he's got a firm limit in mind and will not pay a penny more, while Yahoo!'s Jerry Yang says the previous offers were too low, but has not publicly stated what the right price might be. If the negotiations go nowhere, Microsoft could follow through on its threat to initiate a hostile takeover, but in the long run that could wind up costing even more money.

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