Microsoft Corp. [MSFT] probably has a spreadsheet that lists the incremental cost of paying an additional $1 per share of Yahoo! Inc. [YHOO], ranging from  the current $31 a share offer ($44.6 billion), to $32 ($46 billion) or $33 a share ($47.5 billion) as is currently being discussed, all the way to $37 ($53.2 billion), a figure that Yahoo! execs believe their company is worth.

The math is simple, as Yahoo! has 1.4 billion shares outstanding, so every extra buck adds a cool $1.4 billion to the price tag. This is one of the main reasons why Microsoft is hesitant to increase its offer price, particularly since it would be, in essence, bidding against itself.

The other reason it may look at that spreadsheet (we figure Microsoft is paper free) a few more times is that it still is trying to determine whether Yahoo! is really worth $31 a share, let alone an additional couple of dollars. But we're guessing that Microsoft CEO Steve Ballmer crunched all of the numbers ahead of time and didn't embark on this journey without coming to the conclusion that it was. He also knew Yahoo! probably wouldn't jump at the first offer and has the proverbial "wiggle room" to increase the offer price. This is Microsoft after all.

While Microsoft could also choose to walk away, watch as Yahoo!'s shares collapse, then come back with an offer that could potentially be even more appealing to Yahoo! shareholders, we think that's less likely at the moment. Perhaps the only fundamental thing that's changed as the saga enters its third month is that Yahoo! has found a way to make Microsoft sweat, should it be able to pull off a search advertisement outsourcing deal with Google Inc. [GOOG]. Google is, after all, the main reason why Microsoft is trying to buy Yahoo!. Allowing those two to come together (taking out the possibility for the time being the antitrust issues of a Yahoo!-Google search combination) sets Microsoft even further back.

Ballmer will probably take one more stab at Yahoo! for the aforementioned $32 or $33 a share and hope Yahoo! shareholders exert enough pressure on the company to sell. Even with the Google deal, it's difficult to see how $33 today is worse than some future payday with current management still in control. But Yahoo! could once again balk at that offer, leaving Microsoft in roughly the same position it currently finds itself. Does it want to deal with another month or two standoff, or would it be better to move on and find another way to spend its billions? - David Shabelman

See May 1 post on Ballmer's presentation to employees from Alley Insider
See May 1 post on tensions among Microsoft employees from All Things Digital
See April 29 post on Ballmer's persistence from The New York Times