The weekend has come and gone without a deal getting done between Microsoft (MSFT, $29.83) and Yahoo (YHOO, $26.80). Microsoft had given Yahoo’s board of directors until Saturday to agree to its proposal or face a the possibility of a tender offer and proxy battle. Although Microsoft hasn’t revealed its next move, I would expect some kind of response within the next day or two.

The stakes are high for both sides and Microsoft has already hired a major proxy solicitation firm. It has also been reported that the company has prepared its own board of directors to replace Yahoo’s board, so we’re likely to see Microsoft pursue the deal.

On the other hand, questions abound as to if this deal is what’s best for Microsoft. It has been leaked that Microsoft’s higher executives do not want this deal to go through and mergers are always a tough thing to get done anyway.

If Yahoo is successful in fending off Microsoft then shareholders are going to want to see results. Will Yahoo’s stock hold up if Microsoft walks away and what will happen to Microsoft’s shares?

In the meantime, the one company that is benefiting the most is Google (GOOG, $544.06) which is the same company that both Microsoft and Yahoo are trying to catch.

Rick Rouse