Microsoft's board of directors met Wednesday to consider the company's next move in its pursuit of Yahoo, according to unidentified sources...

Microsoft’s board of directors met Wednesday to consider the company’s next move in its pursuit of Yahoo, according to unidentified sources quoted in The Wall Street Journal. But no announcement had been made by late in the day.

A Microsoft spokesman said it does not comment on its board meetings.

The deadline Microsoft set for Yahoo to make progress toward an agreement on its takeover offer, now a month old, passed last weekend without action.

Microsoft Chief Financial Officer Chris Liddell said last week the company was considering its options, including a hostile takeover and dropping the deal. He said Microsoft would “provide updates as appropriate” this week.

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A hostile takeover would likely involve a proxy fight to oust Yahoo’s 10-member board — including co-founder and CEO Jerry Yang — and taking the offer directly to shareholders.

But Microsoft apparently is having second thoughts about that approach, which probably would involve several months of animosity and distraction, with no assurance of victory.

Yahoo’s board maintains the Sunnyvale, Calif., company is worth substantially more than Microsoft’s initial bid of $44.6 billion, or $31 per share.

The Journal reported that Microsoft privately indicated it might be willing to boost its offer to $32 or $33 per share, but it also said that might not be enough to wrap up a friendly deal because some of Yahoo’s major shareholders have signaled they want at least $35 a share.

Microsoft’s shares lost 12 cents to close at $28.52 on Wednesday.

That put the value of the current half-cash, half-stock offer for Yahoo at $41.8 billion or $29.06 a share. Yahoo’s shares gained 5 cents close at $27.41 on Wednesday.

Yahoo’s stock price stood at $19.18, near its four-year low before Microsoft made its offer three months ago.

Even if Microsoft decides to withdraw its bid — one of the possibilities it is considering — some observers think it could return with another proposal if Yahoo’s stock deteriorated during the next few months.

Material from The Associated Press is included in this report