Microsoft (NASDAQ: MSFT) is not raising its bid for Yahoo! (NASDAQ: YHOO). According to The Wall Street Journal, Microsoft and other deal "strategists argue that the worsening economic downturn and stock-market weakness make the original bid look even more generous."

And why should Microsoft make a move? No other bid has emerged. The Yahoo! three-year projections, released to the public has fallen on deaf ears. On most days the portals's stock trade about $4 below the Redmond offer, a sign that investors fear Microsoft could walk away or Yahoo! could cut a deal to merge with AOL, which would drive the Yahoo! stock down. Such a deal could also cause lawsuits from shareholders who expect the board to take the best offer. Yahoo! traded at $19 just before Microsoft's offer.

Yahoo! is trapped. Microsoft knows it. Yahoo! knows it, too. It has tried to find a way out of the trap, but there is none.

Douglas A. McIntyre is an editor at 247wallst.com.