Updated: Bill Gates: Not Haggling Privately on Yahoo Bid; Microsoft To Authorize Proxy War: Report

So Microsoft (NSDQ: MSFT) is not taking the bait, at least not yet: Bill Gates said Microsoft is not haggling on the bid price with Yahoo behind the scenes, in an interview, reported by AP. Of course, this does not mean it won’t raise the price publicly, even though Gates said he thinks it is a fair offer. “There’s nothing that’s gone on other than us stating that we think it’s a fair offer,” Gates said, pointing out the obvious: the options for Yahoo aren’t that great.

Meanwhile, Reuters quotes Gates on the same interview, and he said that Microsoft will invest more into search and competing against Google (NSDQ: GOOG), with or without Yahoo (NSDQ: YHOO). “We’d get there faster if the great engineering work that Yahoo has done and the great engineers there were part of the common effort,” said Gates.

Update: Not only is Microsoft not talking about raising its bid, it’s putting the word out that it may step up its game. DealBook, citing sources briefed on the plan, says Microsoft will authorize a proxy fight at Yahoo starting this week. The move, which will cost Microsoft $20-$30 million represents another way Microsoft can apply pressure to the Yahoo board. Because Yahoo’s board election is staggered, and directors need only a plurality of the votes, it’s more vulnerable than some to such an action.

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