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The software giant is reportedly considering a bid worth just over $9 billion for Logitech, which is currently valued at around $6.3 billion.

Buying Logitech would make Microsoft the world's largest maker of computer mice and give it a significant presence in the speaker and gaming hardware markets, potentially tying in with its Zune music players and Xbox games console.

Neither company has commented on the speculation, which has added 12% to Logitech's stock price.

Logitech has had a strong presence at CES this week, introducing new hardware including a palm-sized Bluetooth keyboard [see picture] - "for people who have connected their PC to their TV, the highly compact, stylish diNovo Mini keyboard makes it easy to control PC entertainment from the sofa" - and a new surround-sound speaker system for PCs.

PC Pro is reporting direct from CES 2008 in Las Vegas all this week, bringing you interviews, breaking news and all the new technology you could hope for. You can find the latest coverage at our CES homepage.