Giving no hope of a higher takeover price, Microsoft on Thursday reiterated its threat to wage a proxy war to take over the Sunnyvale, California based global Internet services company, Yahoo. The Redmond, Washington based software giant sent a strong signal that it may also walk away from the increasingly bitter merger battle.

Microsoft warned Yahoo that it was ready to go hostile or even call off its bid if it maintains "unrealistic expectations" of a better deal. In a conference called to discuss the company's third fiscal quarter results. Microsoft Chief Financial Officer Chris Liddell said, "Speed is of the essence for the deal to make sense." The CFO said, if no deal is reached by this weekend, Microsoft will reconsider its offer and reveal new plans next week.

The Microsoft executive said, "These alternatives clearly include taking an offer to Yahoo shareholders or to withdraw our proposal and focus on other opportunities," either from internally generated growth or growth through acquisitions.

Speaking of Yahoo's moves to frustrate Microsoft's unsolicited merger proposition, Liddell said, "Unfortunately, the transaction has been anything but speedy and has been characterized by what would appear to be unrealistic expectations of value."

Microsoft that sees Yahoo as a way to compete with arch-rival Google, initially proposed $44.6 billion for acquisition, but Yahoo's board of directors rejected Microsoft’s offer saying the undervalues the beleaguered Internet portal. Microsoft has been continuously saying that it considers its offer full and fair and that it does not intend to raise its price.