Report: Microsoft Will Probably Raise Yahoo Bid

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In what will probably surprise no one, InfoWorld is reporting that Microsoft will most likely increase its initial $44.6 billion bid for Yahoo, according to a Citigroup Investment Research analyst—in essence, a compromise on the staring contest that’s been going on since Microsoft’s initial offer last month.

“We believe that a Yahoo sale to Microsoft—at a price higher than the initial $31 [per share] bid—is the most likely outcome,” said analyst Mark Mahaney in a research note Monday.

Mahaney said Microsoft is unlikely to walk away from the deal because it has yet to make significant inroads in the area of online advertising, especially against market leader Google, despite efforts to do so for the past three to four years, according to the article. The only way Microsoft could compete with Google would be to acquire Yahoo, the analyst said.

(Image credit: NYT)