In the absence of a bidding war for Yahoo! (YHOO), Microsoft (MSFT) stands pat on its original $42 billion buyout offer.

Seeing no reason to bid against itself, Microsoft looks willing to wait it out, according to a report Tuesday in The Wall Street Journal.

The news comes two weeks after Yahoo argued that it deserved a higher bid in a 37-page presentation that highlighted strong cash flow projections, the comparative value of other Internet deals and the online ad clout the company has here and abroad.

Yahoo shares are up more than 10% since the plea for a higher offer was made public, largely because the company’s financial outlook appeared solid, alleviating concerns that the Net giant was feeling the effects of an economic slowdown.

But no white knight has appeared with a sweeping offer to carry Yahoo away for billions more. Chats with other players like Time Warner (TWX) (the parent of Fortune and CNNMoney.com) and News Corp. (NWS) have lacked the full package that Microsoft offered.

“We still expect Microsoft to raise its bid at the eleventh hour, when the companies are already deep in negotiation, but there is no reason to do it before then,” writes blogger Henry Blodget.

Microsoft seeks Yahoo’s online assets to help it counter the growing threat from Google (GOOG). The Web search giant has targeted Microsoft’s core PC application business with free, often ad-supported network-based software.