While Microsoft Corp. [MSFT] continues to maintain it isn't afraid to walk away from Yahoo! Inc. [YHOO] and sees no reason to raise its $31 per share offer, it won't necessarily walk away unscathed, according to some of the recent analysis of the software maker's quarterly earnings report Thursday afternoon.

One of the weakest parts of the earnings report was the company's online business, the same business that it would bolster through an acquisition of Yahoo!.

"The online business remains a weak spot and a strategic necessity for Microsoft as software shifts away from the PC desktop to be delivered as a service over the Internet," The New York Times notes. "Google and others are offering online software that poses a long-term challenge to Microsoft's desktop programs."

While that nugget was buried at the bottom of a lengthy analysis of the company's earnings, it could make its way to the forefront of the two companies' stalled acquisition talks should Microsoft decide Yahoo!'s extensive online presence is too valuable to ignore.

That, of course, is just one scenario among many other that suggest Microsoft could drop its offer, potentially waiting for a resulting decline in Yahoo!'s share price that could enable it to ultimately buy the company for an even lower price -- a scenario that is becoming more popular among analysts who follow the company.

"It is becoming increasingly more difficult to envision Microsoft raising the bid after consistently indicating that the current bid may be too high," wrote Piper Jaffray & Co. analyst Michael Olson.

Added Charles DiBona of Sanford C. Bernstein,  "[There is] at least some reasonable chance that Microsoft might walk away, even if only for a while." - Andrea Orr

See April 25 story on Microsoft's earnings from The New York Times
See April 24 story on Microsoft's weekend deadline from Tech Confidential