I think in any of your 3 cases, if Microsoft pays 85 million then they are already ahead.
I'll be willing to bet that winning 1% of the search market cost much more than 85 million, and they'll get a much larger share of the market than 1%, even under your most pessimistic scenario.
I agree, I was actually surprised that MS didn't approach Firefox with a better offer right now. It makes senses now that I know there is a contract with a expiration.
Larger park means more advertiser interest for Bing. It would even be more profitable for Bing than it is for G because they need to conquer some of the G users.
I'll be willing to bet that winning 1% of the search market cost much more than 85 million, and they'll get a much larger share of the market than 1%, even under your most pessimistic scenario.