Microsoft not going to increase offer for Yahoo

A typical takeover effort typically starts with a negotiating bid, that is normally not exceptional, and then over a period of time, there is pressure for the bid to go up. What typically happens at this time is that more contenders will jump into the fray, putting pressure for increasing the bid; also, what may happen is that the board of the company being acquired pushes for a higher bid as a condition of accepting the bid; and in some cases, influential shareholders holding significant shares may agree to tender shares if the price being paid is increased.
However, the saga of Microsoft's takeover of Yahoo is not following any of these trends. The refusal of Yahoo's management to accept this offer was not a surprise, but everything else is. The value of Yahoo's bid is overall so high, that no white knight could be found who would be willing to fork out that kind of money. Not much of relief to Yahoo in this regard. Microsoft has also steadily refused to increase its bid so far, maybe in the expectation that eventually the pressure of investors and employee morale decrease will force Yahoo to accept, and there are signs that this may be happening:

Microsoft Corp is evaluating its bid for Yahoo Inc because the Internet company may have lost value since Microsoft made its offer, people familiar with the matter said on Friday. The news, first reported by Reuters, sent Yahoo shares down more than 5 percent in extended trade.
After weeks of silence, recent comments from various sources to journalists suggest the software maker is hardening its stance and pushing Yahoo for action. The sources told Reuters that Yahoo has lost key personnel, making the company less valuable, while generous severance packages it handed out to executives and full-time employees in the case of a takeover have made it more expensive.

Of course, if Yahoo starts to lose key personnel and the industry sees much lower growth, then any hint of Microsoft lowering its bid may have a very strong impact on Yahoo. To some extent, analysts have made this deal a done deal in the end, that is, no matter the discussions, the deal will be made (in order to give the 2 companies a fighting chance against Google).