It has been two months since Microsoft made its surprise $31-a-share bid for Yahoo! and there has been little movement since.
The denial from sources within Microsoft that an increased offer will be made goes against the speculation that has come from some tech blogs.
The source told Reuters: "Why would Microsoft bid against themselves? The company sees no reason to bid against itself."
The source went on to say that the software giant sees no point in offering more cash because no "viable strategic alternatives have emerged".
Microsoft and Yahoo! are reported to have met only once since the January 31 offer was made. During that meeting they discussed how the potential merger might work.
Since the Microsoft was made Yahoo! has been holding talks with various parties about potential tie-ups. These have included talks with Google, Time Warner's AOL and Rupert Murdoch's News Corporation about bringing together MySpace and Yahoo!.
However, none of these talks have led to any concrete proposals and a recent investor road show by senior Yahoo! executives to boost support to fight the Microsoft bid was apparently underwhelming, underscoring fears by investors that the management of Yahoo! has no clear vision to take the internet giant forward.
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