Microsoft's board met Wednesday to decide how to proceed with the company's bid to acquire Yahoo, although no final decision was reached, The Wall Street Journal reported.

The major stumbling block in the negotiations has been the price, which Microsoft is willing to increase to up to US$33 per share, but not to the $35 to $37 range that major Yahoo shareholders, management and board members want, the Journal said, citing anonymous sources. Microsoft's original cash-and-stock offer, made on Feb. 1 and valued at US$44.6 billion at the time, stood at US$29.12 as of Tuesday's market close, the paper said.

One observer suspected that Microsoft leaked the information about its latest deliberations to help push its agenda.

"This leak is obviously a calculated attempt to dangle another few dollars in front of Yahoo shareholders in hopes that they will put pressure on Yahoo to strike a deal," wrote Silicon Alley Insider's Henry Blodget in a blog post. "We suspect Ballmer and the board may now wait and see what impact this leak has before making their final decision."

There was no official announcement from either company by the close of the U.S. business day Wednesday. A spokeswoman for Microsoft said the company does not comment on board meetings, citing company policy.

An announcement from Microsoft is now expected later in the week, the Journal said.

Microsoft's next move is something that all parties with a stake in the deal have been waiting for since Yahoo failed to agree to a deal by Saturday, the deadline Microsoft had set three weeks earlier. Observers had expected a reaction from Microsoft on Monday morning, but as the silence stretched into Wednesday afternoon, the media speculation mill has gone into overdrive.

Microsoft CEO Steve Ballmer has been lobbying big Yahoo shareholders this week so that they, in turn, will pressure the board to accept Microsoft's bid, since Microsoft would prefer not to have to launch a hostile takeover, the Journal reported.

In the meantime, Yahoo and Time Warner have continued exploring the possibility of Yahoo merging with AOL in exchange for a 20 percent stake in Yahoo for Time Warner, the newspaper said.

In addition to attempting a hostile takeover, Microsoft has other options, such as raising its bid to a level agreeable to Yahoo's board or walking away, a possibility first floated by Ballmer last week. The company may also launch a proxy battle to replace Yahoo's board.

Certainly, Microsoft expected the acquisition process, now nearing its third month, to flow much more smoothly and quickly, given the company's urgency to boost its Internet unit so it can better compete against Google and capitalize on the growth of the online advertising market.

(Additional reporting by Nancy Gohring in Seattle.)