Microsoft ready to walk away from Yahoo

Just days ago, Microsoft said it would continue to pursue Yahoo whatever its quarterly results (which were good) as the deadline for its $43.6 billion bid creeps ever closer.

But chief executive Steve Ballmer has now told a press conference packed with journalists near Milan that if the matter isn't resolved soon - namely Yahoo's execs accept Microsoft's offer - the computing giant is prepared to walk away.

"We're prepared to move forward without a merger with Yahoo", Ballmer said. "We think the best way to move forward quickly (and gain critical mass against Google) is to come together with Yahoo."

"Hopefully that works. But if it doesn't, we go forward", he said. "Time is money. We made (that) clear in the last letter we sent."

It was in this letter that Ballmer set this Saturday as a deadline for its offer and also threatened a proxy battle after this, going straight to Yahoo's shareholders and bypassing its board.

Analysts are, however, playing down the threat that Microsoft will walk away.