Microsoft won't raise Yahoo! bid

Bill Gates has claimed that Microsoft has not been haggling with Yahoo! over the rejected buyout offer for the search engine.

"We sent them a letter and said we think that's a fair offer. There's nothing that's gone on other than us stating that we think it's a fair offer," Gates said.

Two weeks ago Microsoft made an offer to buy Yahoo! in a deal worth $42 billion (£21.4 billion).

The search engine turned down the offer claiming it "substantially undervalues" the company's assets.

Gates said yesterday that he believed the offer to be a fair one and claimed Yahoo! should "take a hard look at it".

Microsoft are said to be keen on acquiring Yahoo! as a way of closing the gap and forming a challenge to Google.

A similar deal was rejected two years ago when Microsoft and Yahoo! held merger talks that ultimately came to nothing.

Meanwhile, it was reported over the weekend that Yahoo! had been in talks with News Corp over a complex takeover deal.