Microsoft has reportedly focussed its attentions on acquiring fellow major player Yahoo!.
According to a report in the New York Daily Post, the software giant is pursuing the search engine with renewed vigour now that it has seen its attempts to buy online marketing agency DoubleClick lose out to Google’s approach.
Microsoft is also thought to be on the offensive as Google moves into the desktop applications arena a sphere traditionally dominated by the Redmond firm.
Wall Street sources told the newspaper that Yahoo! is worth an estimated $50 billion (£25 billion).
A source said: "They’re getting tired of being left at the altar. They now seem more willing to extend themselves via a transaction to get into the game."
Last week, blogger John Battelle wrote that Yahoo!’s executive vice president Jeff Weiner had revealed that the firm was open to negotiations with Microsoft.