Despite meeting yesterday, the Microsoft Board of Directors - according to the Wall St. Journal - has not decided whether its $31 a share offer for Yahoo!, which has fallen in value to $29 a share in line with a fall in Microsoft's own stock value, should be hoisted to $33 a share in an attempt to keep alive Redmond's two-year pursuit of the Silicon Valley based search giant.

Steve Ballmer (pictured) was talking about perhaps walking away from the whole deal last week, though not many commentators took it literally.

The LA Times reports this morning:

"Much of the decision on whether to press forward resides with Ballmer. A growing number of Microsoft executives are urging him to find other ways to bolster the company's online business. Even top executives don't know which path Ballmer will choose, one person said."

And the New York Post notes:

"Yahoo! has remained firm that Ballmer's original $31 a share cash and stock offer, which is now valued at $29.06, substantially undervalues the company. The two sides had made progress on some terms of a merger about 11 days ago at a meeting in Portland, Ore., but the talks did not include negotiations on the price of a transaction, sources familiar with the situation said.

Those talks ended abruptly when the Microsoft camp, including Ballmer, became steamed after one of Yahoo!'s advisers mentioned that the company was worth $40 a share - or about $14 billion more than Microsoft's offer, source said."

According to a transcript of remarks made by Microsoft finance chief Chris Liddell  to employees, and filed by the company with the Securities and Exchange Commission, the curent options being considered in Redmond include going directly to Yahoo! shareholders or "to walk away and go back to our original organic strategy" -- i.e. competing with Google through its own homegrown technology.

The Seattle Post-Intelligencer has this to say:

"Some analysts think Microsoft ultimately will complete the deal. Matt Rosoff, analyst at Kirkland-based research firm Directions on Microsoft, said the company probably will end up paying a couple of dollars more per share than its original offer. Alternatively, he said, the company may drop its offer temporarily and try to revive it later. 

The standoff between the companies is unusual in part because it's happening publicly, not behind the scenes. Typically, Rosoff explained, these kinds of negotiations 'go on well before an announcement is made.'"

• What's Yahoo! Up To With RIA Widgets?
• Microsoft-Yahoo! - Around the Bid in Eighty Blogs
• Microsoft-Yahoo! - Three Reactions
• Is Yahoo! Too Large a Company to Force into Microsoft's Ways?
• Microsoft-Yahoo! Update From Platform & Services Division President, Kevin Johnson
• Ray Ozzie: Microsoft and Yahoo! Would Not Just Be Smashed Together
• Latest Reports from the Microsoft-Yahoo! Front
• Microsoft-Yahoo! - Microsoft Threatens To Walk
• Microsoft-Yahoo! Microsoft Maybe Willing To Sweeten the Deal