The deadline Microsoft gave Yahoo to agree to its buyout offer comes on Saturday, and there is some speculation that Microsoft could simply drop its offer and walk away if the deadline lapses without any word from the Internet search and advertising company. Microsoftis less than stellar quarterly earnings may have left it in a position where buying Yahoo no longer makes sense, according to MarketWatch.

Endpoint Technology Associates analyst Roger Kay thinks that Microsoft now has to sort out complex financial issues, and that dropping its unsolicited Yahoo buyout offer may be one of the companyis options. He noted that CEO Steve Ballmer may be "getting heat from inside."

He added that buying Yahoo would force Microsoft into debt, and that "debt is expensive these days."

Friedman, Billings, Ramsey & Co. analyst David Hidal, on the other hand, sees Microsoftis hints that it could walk away from its offer as little more than posturing. "I think Microsoft is in a position of leverage here," he said. "If Yahoo were smart, theyid be talking to Microsoft today. Itis inevitable I think that Microsoft is going to buy Yahoo, whether itis a proxy or friendly."

Microsoft presented Yahoo with an unsolicited US$44.6 billion buyout offer at the beginning of February after the Internet search company reported disappointing earnings. Yahoo said the deal was undervalued and rejected the offer. Microsoft later presented Yahoo with an ultimatum saying that a hostile takeover was a possibility if the two companies didnit reach an agreement by April 26.

Both companies have been publicly quiet about the buyout offer for the past few days.