Microsoft's CEO stated categorically to assembled journalists that the $40.9 billion offer it has made for Yahoo is fair.

Despite the rejection of the offer by Yahoo's board; and speculation that there may be more money in the pot, Microsoft looks set to stick to its offer.

CEO Steve Ballmer said at a news conference: "We still think the deal makes sense with the price and structure that we announced and we hope that over time that becomes a reality and we're working toward that".

"There's been a range of dialogue and there's a range of alternatives being considered. I think it's best for me not to get into the detail", Ballmer said at the event in Hanover, Germany, on the eve of CeBIT, Europe's biggest technology fair.

According to Reuters, Microsoft would not clarify whether Ballmer was referring to talks with Yahoo or past negotiations.

Ballmer also would not answer questions as to whether Microsoft was preparing itself for a proxy battle with Yahoo's board, which could see it attempt to win over shareholders to oust the current hostile board and appoint a team that would give the buy-out the go-ahead.

In fact, the conference simply revealed that the two companies remain at a stand-off with Microsoft refusing the raise its bids; Yahoo trying to find alternatives to a hostile takeover; and Yahoo shareholders getting increasingly angry.

Microsoft chief financial officer Chris Liddell said nothing has changed in the impasse between the two companies.

"We continue to look at our options", Liddell said at the Morgan Stanley Technology Conference. "There is no news on Yahoo."