Microsoft (MSFT) plans to continue to stand firm on its Yahoo (YHOO) bid, the WSJ says--a report that will likely come as a disappointment to those hoping for a pre-emptive hike. We still expect Microsoft to raise its bid at the eleventh hour, when the companies are already deep in negotiation, but there is no reason to do it before then.

Any time information like this appears in the press, one has to ask why the sources wanted it there, and in this case, Microsoft is obviously using the WSJ to tell Yahoo shareholders that they're not going to get rewarded for playing hard to get. Yahoo shareholders have been pretty patient on the whole, and Microsoft is probably hoping they will now tell Yahoo to get on with it.

According to the WSJ, the two companies have had only one face-to-face meeting (and, presumably, many backchannel phone-calls). Although the WSJ's Microsoft sources are quick to point out that time is working against Yahoo--deteriorating economy, Yahoo exhausting all other options, etc.--time is working against Microsoft, too. Every day that it waits is another day before the deal closes and the combined company gets down to business.

Kara Swisher says major Yahoo investors are increasingly dismayed by Yahoo's intransigence, which some chalk up to Jerry Yang's "Founderitis." We think Jerry's actually handling a tough situation well, and in any other industry, we'd have no problem with his waiting another couple of months to try to bore Microsoft to death. In this industry, though, the competition is just moving way too fast, so we think it's time for the companies to get on with it.

See Also: Microsoft to Raise Yahoo Bid to $34--Citi