Microsoft CEO Steve Ballmer scripted the latest chapter in the ongoing Yahoo-Microsoft saga by reiterating that his company was not interested in raising the price offered for the search-engine giant.

He made this statement at the launch of Microsoft's web portal for North Africa, MSN Maghreb, in Morocco, and repeated his stance at a conference in Italy after Yahoo had declared its quarterly results. Microsoft's cash-and-stock offer of 30th January had originally valued Yahoo at $44.6 billion, but has since decreased in value following a decline in Microsoft's share price. (See: Microsoft makes $44.6 billion bid for Yahoo!)

Ballmer said Microsoft would hold firm on its $43.2 billion offer for Yahoo regardless of whether Yahoo's quarterly results impress or disappoint investors. The Yahoo board of directors had earlier rejected Microsoft's unsolicited bid at $31 a share saying it undervalued the company's assets and growth potential, and are expected to use the results to justify their argument. (See: Yahoo bullish on its future; expects higher Microsoft offer)

"We think we can accelerate our strategy by buying Yahoo and will pay what makes sense for our shareholders," Ballmer said. "I wish Yahoo all the success with its results but it doesn't affect the value of Yahoo to Microsoft."

Yahoo, owner of the second most popular search engine after Microsoft's arch-rival Google, yesterday reported its first quarterly profit increase in more than two years and gave a forecast for this period that met analysts' estimates. It reported a profit of $542 million in the first three months of the year and renewed promises of even better results.

Yahoo's sales climbed 14 per cent last quarter, while search leader Google posted growth of 46 per cent. The earnings report includes $401 million Yahoo took in from an initial stock offering by Chinese Internet firm Alibaba, in which it has a stake.

The shares dropped in extended trading on investor disappointment that the growth wasn't stronger.

Ballmer has set a Saturday deadline for Yahoo's board to accept a deal with Microsoft or face a lower bid that it takes directly to Yahoo's shareholders. Speaking at Milan, Italy, he reiterated that Microsoft is ''offering a lot of money'' and it is ''prepared to go forward without a merger with Yahoo'' if the situation so warrants.

Ballmer's stated intention of taking Microsoft's offer directly to the shareholders assumes significance in the light of significant crossholding between institutional investors of the two companies. (See: Yahoo!'s bigger shareholders may opt for merger with Microsoft)

Since Microsoft announced its takeover offer in February, Yahoo has launched new services and made acquisitions, it says, to cash in on the flourishing online advertising market.
 
Yahoo, based in Sunnyvale, California, has four days to reply to Microsoft's offer. Ballmer has threatened to nominate an alternate slate of board members and possibly lower the bid if Yahoo failed to agree to terms by 26th April.
 
Analysts, however, say Microsoft may still decide to raise its bid to $34 a share to avoid losing too many Yahoo employees.