Ever since Yahoo CEO Jerry Yang put out a shareholder presentation promising a 72 percent revenue increase by 2010, hostilities have quieted between the Microsoft and Yahoo. That's because merger negotiations are heating up. BoomTown's Kara Swisher reports that Microsoft might raise its offer to somewhere between $34 and $36 per share to seal the deal. Microsoft CEO Steve Ballmer is also said to be considering offering more cash and less stock in a new bid, fattening Yahoo retention packages, and giving Yang and Yahoo president Sue Decker independence to run the company after it's owned by Microsoft. A display of such gratitude from Ballmer may seem uncharacteristic — until you remember that Yang and Decker's management is what landed Yahoo in this spot.

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