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Microsoft is expected to make an announcement soon on its possible acquisition of Yahoo, but until then the software giant's chief executive Steve Ballmer is keeping everyone guessing.

The deadline for the Yahoo board to accept Microsoft's unsolicited $31-a-share (£15.7) offer passed without comment on Saturday, and the business world has waited all week for a signal from Microsoft as to its next step.

Microsoft is keen to buy the internet search engine to compete with Google but Yahoo claims the $44.6 billion (£22.56 billion) bid undervalues the firm.

Analysts were expecting Microsoft to launch a hostile takeover – rather than raise its price or walk away – and take the offer straight to the company's shareholders.

But Mr Ballmer has implied Microsoft is prepared to abandon the deal if necessary. In an interview with the Wall Street Journal yesterday, the Microsoft head said he can build an internet advertising business without buying Yahoo - it would simply mean the online business takes longer to build.

"With the right circumstances it'll happen. Without the right circumstances it won't happen," Mr Ballmer told the newspaper.

In addition to the enigmatic comments, Mr Ballmer told employees he would not pay "a dime above" what he thinks Yahoo is worth.

"We've got basically the three big options in front of us," Mr Ballmer told staff.

"There's the friendly deal, there's an unfriendly deal, and the third path is simply to walk away. We ought to announce something in very short order."