It may have insisted time and time again that its $41.7 billion buyout bid for Yahoo is "fair"; but it seems Microsoft may soon be upping its offer.

Citigroup has reported that Microsoft is likely to raise its $31-per-share offer for Yahoo.

It added its belief that Microsoft "is capable of and willing to" increase that bid to conclude the deal.

"While we continue to see no other competing bidders, we believe Yahoo is aggressively pursuing strategic alternatives", analyst Mark Mahaney said in a note to clients.

And it is this that could drive Microsoft to raise its offer.

Rumours of a possible buy-out by Rupert Murdoch's News Corp were blown out of the water by the media mogul himself, and all has gone quiet on the Google front - with whom Yahoo's execs were suggested to be having tie-up talks.

However, the whisper that Yahoo is seeking a deal with Time Warner, owner of AOL, is still circulating.

But, despite Yahoo's best efforts, Citigroup concludes that a Microsoft-Yahoo deal is the most likely outcome.

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>> Via - Reuters