After three exasperating months when it appeared neither side was willing to budge, Microsoft Corp. and Yahoo! Inc. were reportedly in talks late Friday, May 2, on a deal that would top the $31 a share, $44.6 billion cash and stock offer Microsoft made in February.

The New York Times reported a source told it that Redmond, Wash.-based Microsoft had raised its bid "by several dollars," from the offer it made Feb. 1, but that a deal was not imminent and talks between the two sides could still break down.

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