Waiting for Steve-o

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What will Steve Ballmer do? The Microsoft chief executive has been huddling with his company’s board of directors, trying to decide the next step in his bid to acquire Yahoo.

Microsoft’s board of directors spent much of Wednesday debating whether to escalate the company’s high-stakes battle to win Yahoo Inc. or walk away, according to people familiar with the talks.

Ballmer has shown increasing willingness to abandon his pursuit of the Internet pioneer as Yahoo shareholders and management seek significantly more money, according to those people, who declined to be identified because they weren’t authorized to discuss the talks.

When it made the unsolicited bid for Yahoo three months ago, Microsoft counted on clinching the deal quickly. But it has encountered significant resistance from Yahoo, which has insisted that the offer was insufficient to insulate the company from the risks it would run in accepting it.

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.

If the Redmond, Wash.-based software company decides to press the acquisition, it could either try to win Yahoo’s approval by sweetening the offer, initially valued at $44.6 billion, or take the fight hostile by nominating a slate of candidates for Yahoo’s board.

Stay tuned for the latest in this takeover saga.

-- Chris Gaither