Microsoft closing on Yahoo move

According to reports, Microsoft is leaning toward going hostile in its pursuit of Yahoo. In a meeting with employees yesterday, Ballmer said the options include completing a negotiated deal with Yahoo, pursuing a hostile takeover, or walking away.

Ballmer said: "We've got basically the three big options in front of us. There's the friendly deal, there's an unfriendly deal, and the third path is simply to walk away. We ought to announce something in very short order."

He added: "I know exactly what I think Yahoo is worth to me. I won't go a dime above, and I will go to what I think it's worth, if that gets the deal done."

Microsoft first approached Yahoo with a $44.6bn (£22.5m) takeover proposal in January, but has met stiff resistance from the company. Yahoo has unveiled a string of initiatives aimed at convincing shareholders of the merit of resisting Microsoft ownership.

Three weeks ago, Ballmer gave Yahoo an ultimatum to accept the bid by 27 April, but with that deadline now passed, it now has to decide whether to walk away from the bid. Ballmer had threatened to start a proxy fight to oust Yahoo's directors if the deadline was not met.