News 

The $1.5 billion figure was discussed in a communication between the general counsels of Microsoft and Yahoo, and came to light when a lawyer representing Yahoo mentioned the amount in a 24 March hearing in a lawsuit in Delaware Chancery Court.

Edward Welch, the lawyer representing Yahoo, also said during the hearing that 1,000 layoffs Yahoo made in February were the only job cuts the company planned to make. "There are no more reductions in force planned for the future," he said.

Two Detroit pension funds have filed the shareholder action

Battling with the board

Separately, Microsoft is weighing nominating its own slate of directors for Yahoo's board while keeping its options open on putting a merger offer directly to shareholders, according to a report in The Wall Street Journal.

Microsoft had set a deadline of last Saturday for Yahoo to agree to its unsolicited $31 per share cash-and-stock offer but the two appear to have entered a standoff.

Yahoo has said Microsoft's $31-per-share initial takeover offer "substantially undervalues" the company and that it is considering a variety of alternatives. Microsoft's deal is currently valued at around $42 billion.

Microsoft said last week it would declare its next moves in the takeover battle this week but has been quiet so far.

A Reuters poll found an overwhelming majority of Wall Street analysts expect Microsoft to launch a hostile bid at its current price of $31 per share in cash and stock.