Yahoo and Microsoft executives have reached an impasse. Executives from both sides met this week near Yahoo’s headquarters in Sunnyvale, Calif., but failed to reach an agreement, according to a Wall Street Journal report.

This is just the second time the two have met since Yahoo (YHOO) rejected Microsoft’s $45 billion cash-and-stock offer in February. Microsoft’s dropping share price has pushed the value of its original offer of $31 a share to roughly $29. Yahoo thinks that’s too low, and Microsoft (MSFT) thinks the deal’s fair. Yahoo’s stock traded at $27.89 in mid-day trading Friday.

Some industry watchers believe the magic number in order for the deal to get done quickly is $34 a share. Citigroup analyst Mark Mahaney has repeatedly stated that a merger is likely at that offer. “We believe buying Yahoo shares here provides an attractive return,” Mahaney wrote in a recent report.

More talks between the two companies are unlikely before Yahoo reports its first-quarter earnings on April 22. Last month Yahoo executives including CEO Jerry Yang and president Sue Decker went on a weeklong roadshow to present to major investors on the company’s 2008 outlook. All Things D’s Kara Swisher reported that Yahoo’s institutional investors weren’t impressed.