Steven Ballmer, chief executive of Microsoft, offered Jerry Yang, one of the founders of search engine giant Yahoo, $33 a share, The New York Times (NYSE:NYT) said, citing a person involved in the discussions. Yang refused to consider any offer below $37.

Microsoft made its first offer three months ago, suggesting that the merged company would be able to compete with Google. The (NASDAQ:GOOG) original offer was $44.6 billion or $31 per share.

David Filo, who founded Yahoo with Yang, and Kevin Johnson of Microsoft were also at the meeting.