Microsoft Board Undecided about Yahoo Bid: Report

The Redmond, Washington-based company had shown a willingness to raise its offer for Yahoo to as much as $33 per share of Yahoo in order to avoid a hostile takeover, people with knowledge of the situation told the Wall Street Journal.

Microsoft chief executive Steve Ballmer and Microsoft advisers have lobbied Yahoo's board to do a deal. Ballmer has also appeared ready to walk away from his company's offer completely, people familiar with the matter said.

An announcement is expected later in the week, say people familiar with the matter.

The apparent indecision partly reflects Ballmer's personality, people familiar with his thinking told the Journal. Friends and Microsoft colleagues say he can be unpredictable and is at times swayed by new information.

Meanwhile, Yahoo could extend its search advertising relationship with Google Inc to include a broader pact than the current one, pending developments this week with Microsoft, people familiar with the matter told the Journal.

Yahoo is also continuing to follow up on a possible merger with Time Warner Inc's AOL unit, according to people familiar with the matter, the Journal said. Time Warner would get about a 20 percent in Yahoo if the deal is were made.