Microsoft this week indicated a willingness to raise its bid to as much as $33 per Yahoo share, The Wall Street Journal reports. This is an attempt to avoid the hostile takeover battle that CEO Steve Ballmer had threatened, according to unnamed sources close to the situation:

"Yet Mr. Ballmer in recent days has also appeared ready to walk away from Microsoft's offer altogether, say people familiar with the matter, as Yahoo and some of its shareholders seek significantly more money. Microsoft didn't reach a final decision following Wednesday's board meeting, according to people familiar with the matter. The directors gave Mr. Ballmer broad discretion to either go hostile or abandon the Yahoo pursuit, and the final outcome remained a toss-up in the wake of the meeting, the people say."

Meanwhile, Kara Swisher of AllThingsD wrote this morning that some of Microsoft's 79,000 employees are increasingly worried about the Yahoo takeover. "Reasons just keep piling on as to why we should not buy Yahoo," said one mid-level Microsoft employee Swisher spoke to. "It's a bet a lot of people are getting more nervous about," especially since Ballmer seems to think that Microsoft's future lies in that direction.