MicroHoo: Game On?

While BoomTown has been wishing that it would not come to this–hoping Microsoft and Yahoo would wise up and actually talk, as many at both companies had been planning would occur in a neutral place like Oregon–it is more likely than not that Microsoft is poised to make a significant announcement tomorrow morning about its next move in its takeover battle with Yahoo.

What exactly that move will be is still unclear, but sources said it could come sometime after the stock market opens tomorrow.

While some are speculating the initiation of a proxy fight by Microsoft–as it has publicly threatened to do–to gain control of Yahoo, one person close to the situation said this: “I would not have said this yesterday, but I would not be surprised if they walked away rather than waged war.”

That’s another thing Microsoft (MSFT) has threatened to do too, along with lowering the price it was willing to pay for Yahoo (YHOO).

(The only thing its execs have not threatened to do is attack Yahoo’s Sunnyvale, Calif., campus at dawn on mounted steed– probably because they fear Yahoo will call in nearby Google as backup and Microsoft will then face its solar-powered, lava-lamp-throwing bicycle brigade.)

The only other options possible seem increasingly remote: That Microsoft raises the price by a dollar or two or that it announces it is in substantive talks with Yahoo.

BoomTown prediction: If Microsoft is not careful, someone is going to lose an eye.