Microsoft CEO Steve Ballmer, after he and his underlings spent months saying they'd moved on from the notion of buying Yahoo, says that a deal still makes "economic sense." Yahoo's stock leapt 17 percent, though it wasn't clear from his remarks, made at a Gartner conference in Florida, whether he was talking about a search partnership or a full acquisition. Either way, Ballmer: Make up your frickin' mind. There are 3,500 Yahoos who are about to lose their jobs, not to mention that cushy post-Microsoft severance package Jerry Yang ginned up. Oh, wait, there's more!Microsoft spokesperson Frank Shaw just emailed me, asking me to attribute this to a Microsoft spokesperson: "Our position hasn’t changed. Microsoft has no interest in acquiring Yahoo; there are no discussions between the companies." Says a Microsoft spokesperson. So Microsoft's CEO thinks a Yahoo deal is a good idea — he's just not interested in it. There you have it: Microsoft is officially uninterested in good ideas. We always suspected as much, but it's nice to get it on the record.

Northern California is an enlightened haven of multiculturalism, and globalization requires a diverse workforce. Unless you're a startup, in which case you're going to hire people who look like you. Take, for example, the workforce of Automattic, the maker of WordPress, a blogging program.The company, founded by white male Matt Mullenweg, has just increased its white maleness with the acquisition of PollDaddy, a two-white-males Irish firm. Are we being too harsh on Automattic? Should we give it credit for not being 100 percent white and male? After all, Google prides itself that 32 percent of its employees are women; that it views that level as an achievement shows how imbalanced Silicon Valley's scales of equity are. Still, look at the Automattic company photograph, taken at a staff retreat in Breckenridge, Colo. If I were a woman or a minority working at this company, I'd hide in the corner, too.

Being a public company isn't all it's cracked up to be. Granting stock options is more expensive than it was before accounting rules changed. Sarbanes-Oxley regulations make reporting financials a miserably bureaucratic process. And investors are afraid of all kinds of risk. Computer makers Cray and Sun and software maker Novell have nearly enough cash on hand to take themselves private, The Register observes. KKR, a buyout firm, got a seat on Sun's board after investing $700 million. Debt markets may be frozen, but these tech stocks are so depressed that private takeovers might not even require the issuance of debt. Forget the stock options: Employees would welcome a deal that keeps some of their jobs.

They say, of fastly dropping markets, that one should never try to catch a falling knife. In trying to sell AOL, Time Warner could be letting a sharp blade fly at Yahoo, the most likely buyer for the troubled Internet business. Will a deal happen? If so, for how much? No one really knows, but everyone wants this clumsy mating dance to be over. Henry Blodget floated and then retracted a rumor that a deal was imminent, for something in the range of $8 billion to $10 billion.That sent Yahoo shares dropping twice as fast as the tech-heavy Nasdaq index, a sign of shareholders' displeasure at the idea of paying that much. 24/7 Wall Street thinks that anything more than $5 billion will be viewed as overpaying. Growth in AOL's advertising business is slowing dramatically, as the Internet-access business continues to decline. The only part of AOL that anyone seems interested in is its online-advertising network, born as Advertising.com and recently relabeled Platform-A; Yahoo, too, fancies itself an advertising broker, in imitation of Google's hugely successful AdSense program, which places ads on third-party sites and gives Google a cut of the resulting fees. AOL's Web-publishing businesses? The most-trafficked ones are duplicated by Yahoo's own, more successful media sites in area like sports, news, and finance. And then there's dial-up Internet access, a business no one seems to want. Liberty Media might flip its shares in Time Warner for the business, but only at a bargain price. Yahoo might take it in a package deal, to save the complication of a split, and try to trade the subscribers to someone like Verizon or AT&T in exchange for a long-term advertising deal. So who gets cut? Either Time Warner's shareholders, or Yahoo's, depending on the price that's paid. This deal seems likely to get done, if only because it becomes more embarrassing the longer it takes. But someone's going to end up with their fingers sliced.

Shares of Research In Motion have declined from $148 to $60 in four months, falling along with most tech stocks. The difference between RIM and, say, Yahoo? Microsoft still wants to buy RIM, say some analysts cited by Reuters. Forget Google's still-not-on-the-market Android phones; RIM's BlackBerry is the only real competition for Apple's iPhone.Like Apple, RIM offers not just the hardware but the software and services that run on top of it; RIM does Apple one better by also selling back-end servers that companies install to manage their workers' email. Microsoft is in that same business, but it's not as good as tying everything together as RIM is. The speculation is that RIM shares would have to drop to $40 or so, at which point Microsoft might bid $50 a share, or $28 billion for the company. This much is not speculation: RIM would be a better buy than Yahoo.

Silicon Valley has its own portfolio of toxic investments that no one likes to talk about. The office parks along 101 are littered with the living dead, startups running on fumes of hope and trickles of venture capital. What their future looks like: The $5 million asset sale of Radiance Technologies, a digital-video file-delivery company, to Comcast. An asset sale means that the buyer gets the technology, patents, and servers, while investors are left with the liabilities. Radiance's VCs, who sank $26 million into the company starting in 2000, are unlikely to see much from the purchase. Play that scenario out hundreds of times, and you get a glimpse at what's coming for investors and entrepreneurs. No wonder even sunnily optimistic VCs are losing hope.As it should be. It's always at the height of a bubble that some fad — bandwidth delivery! online ad-networks! social media marketing management! — starts looking like a sure thing. But most startups fail, tech startups included. Few make any money for their investors; VCs, like Hollywood studios, live off the hits. What to do if you work at the 17th Ajax-enabled online calendar to hit the market, the 217th YouTube clone, the 397th online-ad network ? Give up, move on. Despite the headlines, people are still hiring — even, sometimes, as they shed jobs. Wall Street may have failed in its job at allocating capital. But Silicon Valley's particular genius is in matching talent to markets. So embrace it! The world has countless real problems to solve. You're not going to make a fortune copying someone else's idea. Come up with your own genuinely good one, and you'll never have to read about your company's fire sale in Valleywag.

We would never imply that Adrian Holovaty, the supremely talented journalist-programmer who's now the CEO of local-news startup EveryBlock, is being cagey or dishonest about his talks with Google, which continued as recently as last weekend. Our theory: He's just shy and bashful, and doesn't like talking about what a hot commodity he is! Sources close to Google confirm that they are very interested in bringing Holovaty, the creator of a set of programming tools called Django, into the Googleplex. There are not one but two hitches, though.First, there are the conditions of his grant from the Knight Foundation, which is currently funding EveryBlock. The Knight Foundation used to have strong ties with the now-defunct Knight-Ridder newspaper chain; some of those ties now reach beyond the corporate grave, a tipster explains:

The much-talked-about talks between Yahoo and Time Warner to unload AOL? They're definitely on, says a tipster, who also claims Yahoo CEO Jerry Yang and President Sue Decker are in New York trying to cajole Time Warner CEO Jeff Bewkes into a deal before Yahoo announces third-quarter earnings later this month. Any Manhattan stargazers care to keep an eye out for him? Update: Kara Swisher now reports Yang has been in New York recently, but not, as our tipster claims, this week She also has lots and lots and lots of speculation about who will run a merged AOL-Yahoo.

Adrian Holovaty is going to save journalism, darn it, if the industry likes it or not. And he may soon be doing it at Google. The search engine has long suffered from a tin ear in its relations with writers and editors — the people who create the content it indexes. Holovaty gained fame for linking up Google Maps with local crime statistics to create chicagocrime.org, one of the first mapping mashups. And he gained cred in the journalism world by melding programming and reportage at the Washington Post. Most recently, he's been pursuing the same goal at his own local-news startup, EveryBlock, which he funded by winning a contest held by the Knight Foundation. And now Google wants to buy Holovaty's startup, we hear. Holovaty says that he's had no conversations with Google, but did have lunch with a friend at Google's campus last week, which he stresses was "a social matter." The effort to buy his venture — there's no "deal," Holovaty tells us — has hit some kind of unusual hitch. It's not clear what the holdup is.Google's such a natural home for Holovaty, it's hard not to see the deal going through. Besides his journalism work, Holovaty's also the creator of Django, a set of tools for coding in Python, a programming language that's strongly preferred at the Googleplex. (Guido Van Rossum, the creator of Python, already works at Google.) If Holovaty does land at Google, expect him to transform Google News into a site that's more of a database of information than a news archive. He's long been critical of the newspaper industry's focus on stories, rather than information. A police-blotter news report, for example, is not as useful as a website which displays crimes on a map by type and date. If Holovaty's going to save journalism, he may have to do it at a search engine that many believe is killing the newspaper business. They can't say he didn't warn them.

News reports confirm the rumors we heard over the weekend about eBay's layoffs. Details are scant, but our sources say some departments are losing as much as 22 percent of their staffing. Development managers have been told to expect to lose 1,700 "train seats" next year. That's programmer lingo for weeks of developers' time; one train seat is three weeks. Do the math: That means at least 100 programmers are losing their jobs in the cuts. Adding insult to injury: eBay is spending $1 billion in cash and stock to acquire three companies — payments firm Bill Me Later, and two Danish classifieds sites. What a stupid PR move, to combine the two announcements: Those getting laid off will wonder how eBay has money to spend on buying companies but not paying employees.

Liberty Media CEO John Malone told the Financial Times his company is ready to swap its $1.42 billion stake in Time Warner in order to acquire AOL's dialup business. There's just one holdup. "Time Warner still needs to divide the business," Malone complained to the FT. Though it's been more than two years since Time Warner decided to turn AOL into an online advertising concern and abandon the Internet service provider business, AOL won't be completely split until early 2009. Malone isn't the only exec impatient for Time Warner's book keepers to hurry it up. AOL CEO Randy Falco was overheard last week griping: "When is New York going to sell us?"

Viacom subsidiary MTV Networks acquired the rest of software company Social Project, which runs Flux, a platform for social networks. Flux links together sites and gives them social features like messaging and video sharing. MTV already owned a large stake in the company and had 35 sites on the platform. MTV plans to turn Flux into an ad network because "the Web is fragmented,” says Mika Salmi, MTV's president of global digital media. “People are attracted to niches. We have a history in the cable business of going after niches.” True enough: Online, MTV has a history of turning what should be successful, mainstream ventures into mere niches.

Why is a router maker buying Jabber, an open-source AIM clone? Disgruntled network admins (I'm still one in my heart) understand what Cisco's own press release doesn't spell out in English.Jabber isn't just another AIM wannabe. It uses XML trickery to connect to every popular instant message service — AIM, ICQ, Windows Live Messenger, and Yahoo — and to let programmers connect it to other services, be they for man or machine. It's already widely adopted by the IT workers whose managers sign the purchase orders for Cisco networking hardware. By building Jabber support into its switchers and routers, Cisco can make it easy for admins to get alerts from their hardware in the same IM window as their buddies. Cisco can also sell companywide IM setups that are closely tied to Cisco network gear for security and monitoring. Cisco recently picked up PostPath, which makes Linux-based email, calendar and collaboration software. I'm sure someone at Cisco plans to bundle Jabber's instant messaging with PostPath's Outlook-like features and dub it a "platform" to compete with Microsoft. But Jabber's main competition isn't Redmond, it's Dulles. Cisco can now offer managers a way to ban AIM from the workplace, or at least to manage it locally with Cisco equipment rather than routing employees' conversations straight to AOL.

The story that Google was going to buy videogame publisher Valve "any second now," floated by U.K. tech tabloid The Inquirer this morning, is a "complete fabrication," according to Valve executive Doug Lombardi, pictured here. Sorry, Inquirer — I certainly know how it feels when wronged by a "WELL PLACED SOURCE." Maybe demote them to lowercase next time you float their rumor? [MTV Multiplayer Blog]

An announcement that Google will buy Bellevue, Wash.-based company Valve "any second now," according to anonymous sources cited by the Inquirer. At the heart of the deal is Valve's content distribution platform, Steam. Valve is popularly known as the creator of the Half-Life and Counter Strike video game franchises, and built Steam to distribute the massive amounts of data and code to p, and has since become a platform for multiple game publishers. In other words, the company can reliably deliver DVD-sized files, such as content updates and software patches, to millions worldwide over the Internet — and Google fetishizes solutions to scaling problems. [The Inquirer]

Know what a piss-poor economy means at company's like eBay? Besides layoffs, silly. It means great bargains! eBay classifieds exec Jacob Aqraou says that because times are tough, now is the time for eBay to snatch up smaller classifieds websites at low prices. Aqraou told the Wall Street Journal the company wants to buy a couple Eastern European and Scandinavian sites as well as domestic sites targeting car dealers and real-estate agents. Alexa tells us the a list of popular Scandinavian classifieds sites includes Blocket.se, Finn.no, and Eniro.se. Aqraou said eBay will announce its acquisitions within the next several weeks.

Revolution Health, the brainchild of AOL founder Steve Case, is still in talks to sell its health portal to a rival, Everyday Health. The combination would have bested WebMD, the No. 1 health-site operator — until WebMD bought QualityHealth.com today. The Revolution-Everyday deal, meanwhile, could happen within a week — but is currently stuck on financing. Arranging the money to consummate the sale is proving difficult, with Wall Street more concerned with its own survival than the health of Case's startup venture. One way or another, it seems all but certain that Case's Revolution Healthwill end up sold, without much transformation to show for his troubles.Case's quest to transform the healthcare industry has tragically earnest roots; he started the effort after his brother, Dan, died of brain cancer. Hospital bureaucracy always frustrates the patient's kin — but suffering does not always lead to wisdom. Dan, a tech investment banker, might have cautioned Case against this plan. Revolution Health has ended up as a mere information middleman, buying ads on Google and then selling the users who click on them to other advertisers. That's why it inevitably needs to sell; online advertising is a game of volume. With Google eager to bulk up its own health efforts, it's not clear how much longer there will be room for third parties to play. And arbitrage is hardly a revolutionary exercise. Someone needs to fix the healthcare system. Case's story is suitably tragic; his motivation, noble. But he's not the man for the job.

Take-Two Interactive, the marketer of Grand Theft Auto and various sports videogames, has watched its stock price plummet to $16.99 on the news that Electronic Arts has decided to quit trying to buy the company for $26 a share. Much like Yahoo's drop after Microsoft took an offer off the table, Take-Two's shares are headed south of where they were when EA initially made an offer. I'm counting the days until a third company meets the same fate and I get to write the obligatory trend piece.

Over the years, the reports of Napster's death have been greatly exaggerated. But electronics retailer Best Buy may just manage to put a stake in its heart. Best Buy is buying the online music-subscription service for $121 million — $54 million, really, after setting aside the cash in Napster's bank account. A great return on investment, considering Napster's assets last sold for $5 million out of bankruptcy in 2002, right?Wrong. Roxio, a CD-burning software company, snapped up the Napster name and the technical assets of Shawn Fanning's file-sharing startup on the cheap. But sometimes you get what you pay for. Roxio shed its software business and took the Napster name, but never figured out how to profit from it. In the last year, it lost $16.5 million. And yet Napster managed to live on. If anyone can lay it in the ground once and for all, we're betting it's Best Buy. The retailer has stumbled from one unsuccessful online-music strategy to another, most recently through a partnership with RealNetworks' also-ran music site, Rhapsody. Why doesn't Best Buy just ask Steve Jobs for more iPods to sell? That seems easier.

Chang-Won Kim, co-CEO of Tatter and Company (TNC), says Google has acquired the company, which he likens to "Korea's Automattic," the San Francisco-based blog-software startup founded by Matt Mullenweg. VentureBeat reports TNC investors include a SoftBank venture-capital fund. In a post to his personal blog, Chang opines that Google acquired TNC, its first purchase of a Korean company, because "Google has a market share that can only be described as 'minor' in Korea." He goes on to explain why: