Sunnyvale, Calif. - Hoping to avoid a messy proxy battle, Microsoft has increased its bid for Sunnyvale-based Yahoo by "several dollars," The New York Times reported on its web site late Friday. Specific financial terms being discussed have not been disclosed, though Microsoft reportedly has raised the possibility of increasing its current $29.30-per-share offer to as much as $33.

The paper reported that some large Yahoo shareholders have received phone calls from both companies, attempting to gauge what price they would find acceptable.

The news helped drive shares of Yahoo up nearly 7% in Friday's trading.

http://dealbook.blogs.nytimes.com/2008/05/02/finally-microsoft-and-yahoo...

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