As BoomTown reported on Tuesday, The Wall Street Journal is now reporting that Microsoft (MSFT) and Yahoo (YHOO) have been chatting away informally, after a week of faux-wrestling.

It’s been like WrestleMania, except without the excitement and anticipation. Also, no cool names or outfits.

As I posted on Tuesday:

While it is true, as we and everyone else have posted, that Yahoo and Microsoft still have not entered into or even scheduled any formal talks, even after the software giant’s threat to launch a hostile bid came and went over the weekend without action, it is also not true that there are no talks going on.

According to sources close to both companies, there are informal discussions now taking place between Yahoo and Microsoft–via bankers, board members, shareholders and others close to both companies–to try to prevent a hostile takeover scenario or the sudden withdrawal of Microsoft’s offer.

Both options are unattractive for a number of reasons to pretty much everyone and, in BoomTown’s opinion, an excellent example of how juvenile this takeover battle has become (or “amateur hour,” as one source close to both companies described it to me).

A hostile bid by Microsoft, for example, is profoundly distracting to both parties and could result in an exodus of Yahoo staff, along with being risky in terms of certain success for Microsoft.”

And from the Journal this afternoon:

The two sides and their advisers have had informal discussions over the past week, but have been stymied by a divide on the price Microsoft should pay to acquire Yahoo, say the people. Microsoft has been weighing whether to drop its bid or go hostile, and has promised to announce its decision this week. As of Thursday night, Microsoft was leaning toward going hostile, but the situation remained fluid, according to people familiar with the matter.

Now, people close to the two sides are attempting to avert that prospect with discussions they hope could lead to a negotiated outcome, say the people. Microsoft has wanted to avoid a hostile takeover battle, which could drag out and result in distraction and the loss of key Yahoo employees.”

Hopefully, we will find out this morning the 411 on the Microsoft’s (MSFT) latest parry in its attempted takeover of Yahoo (YHOO).

But, before that, let me get this straight: Microsoft CEO Steve Ballmer now wants to go hostile on Yahoo with a proxy fight.

Because earlier this week, he sent smoke signals that he was considering raising the price of his takeover bid for Yahoo.

And just before that, Ballmer was going to walk away from the deal. Except, before that when he was ready to lower his offer.

But don’t forget the friendly path Ballmer was also promising. Even though his initial unsolicited offer started off back in February as, well, hostile.

Calling Dr. Phil!

Perhaps the wacky TV shrink can merge together Ballmer’s multiple personalities into one, much the same way he tried to mend Britney Spears.

OK, that did not go so well. But it couldn’t be worse than the confusion of intentions from Microsoft here, including the latest one reported by The Wall Street Journal’s crack team today that Ballmer had now selected hostile as his choice.

Here is Ballmer’s money quote, the likes of which a Zen master could not interpret: “With the right circumstances it’ll happen. Without the right circumstances it won’t happen.”

What? That just about covers every option possible and then some. This may even require an Oprah intervention.

Here’s BoomTown advice, which we reiterate from yesterday’s post: Offer $33 to $35 a share as a best and final, take-it-or-leave-it offer. Set a 48-hour deadline for Yahoo to enter negotiations. After that, initiate a proxy fight.

This says a lot of things. It says Microsoft is generous (and will even bid against itself). It says it has had it waiting for Yahoo to dangle Google (GOOG) or AOL (TWX) as alternatives. It says definitively that Microsoft wants Yahoo and will fight for it.

Most importantly, it says enough is enough.

And while this may seem like it says a lot of things, it doesn’t seem–as so much of what Ballmer has been saying so far says–like the rant of someone in need of help.

Because, as it stands for Ballmer, that’s what it sounds like right now.