Microsoft expects Yahoo! to accept bid

Microsoft has said that its $44

Microsoft has said that its $44.6 billion unsolicited offer for Yahoo was generous and it expects Yahoo's board and shareholders to agree to the buyout quickly.

"We trust the Yahoo board and the Yahoo shareholders will join with us quickly in deciding to move down an integrated path," Microsoft chief executive Steve Ballmer said a meeting with analysts.

Microsoft's comments follow a weekend of manoeuvring by Yahoo!, which, according to sources, is considering a business alliance with Google to rebuff Microsoft's proposal.

It has also received preliminary contacts from media, technology, telecommunications and financial companies, another source said.

READ MORE

At the same meeting, Microsoft chief financial officer Chris Liddell said the company may borrow money for the first time in its history to fund a portion of the 50-50 cash and stock offer for Yahoo!.

Mr Liddell said he expects Microsoft's revenue to grow at a double-digit percentage in the coming fiscal year starting in July despite a potential US economic slowdown.

Microsoft also announced that its first major update to Windows Vista was released to manufacturing.

Shares of Microsoft rose five cents to $30.50 in early Nasdaq trading, while Yahoo shares rose 44 cents to $28.82.