Democratic presidential candidate Barack Obama spent $3.5 million on advertising online in the first quarter of 2008, $3 million of which went to Google. Granted, Obama's done well in contributions from Googlers — as of Q4 2007, contributors who listed Google as their employer contributed $338,965 to the Obama campaign. Which means that early investment has already paid off tenfold. Or considered another way, Obama can bank a 10 percent discount on ads from Google. The Clinton campaign? It only received a paltry $79,170. Other companies cashing in on election season? Yahoo got only $350,000, which was still $282,000 more than Microsoft. Even urban blog network Gothamist managed to pull in a direct buy worth $2,800.

In April, Microsoft CFO Chris Liddell said the company was not feeling the effects of any economic slow down. Now its is, reports Global Equities Research analyst Trip Chowdhry.

Moneymaking clicks on Google ads in April increased 19.6 percent over the same month last year. The news comes from ComScore, which scared Wall Street senseless in February and March when it reported paid clicks to Google ads were up only 3.1 percent and 2.7 percent year-over-year during those months. Meanwhile, clicks on Yahoo and Microsoft search ads fell 4.4 percent and 9 percent in April, respectively.

Yahoo CEO Jerry Yang and Microsoft CEO Steve Ballmer played golf over the weekend, but neither were able to put the ball in the cup, so to speak. The way Yang put it in his answers to Walt Mossberg's questions at the D6 conference yesterday, a merger between the companies now seems as unlikely as it did the day Ballmer first walked away from negotiating table. "Microsoft is no longer interested in buying the company," Yang said. This news will not please Yahoo shareholders Carl Icahn and his allies, who control at least 29 percent of the company, favor a merger, and have started a proxy fight for control of the company's board. In the above clip, watch how Yang intends to deliver the bad news and fight for his job.

Having walked away from Yahoo, Microsoft is supposedly eager to buy a passel of online-advertising startups. Los Angeles-based Spot Runner is a natural target; it uses Microsoft technologies, has hired Microsoft executives, and was founded by Nick Grouf, who sold a startup to Microsoft a decade ago. Spot Runner's business, creating and placing ads on hard-to-buy, hard-to-sell cable-TV spots, is an area where Google is not at all entrenched. But we now hear a rumor that Microsoft's board has nixed a $550 million deal for Microsoft to buy Spot Runner. Spot Runner just raised $51 million in venture capital, which makes the price tag seem plausible, if hard for Microsoft to swallow. Why the deal fell apart at such a late stage, and in such an embarrassing way — it's rare for boards to oppose management on deals of this size — are unknown. Heard anything more? Spot us a tip.

CARLSBAD, CA — Here's Microsoft dealmaker Hank Vigil chatting up AOL COO Ron Grant over lunch at the D6 conference. Why is that interesting? Because we overheard Vigil gabbing away on his cell phone earlier today about the "economic terms" of some deal. Microsoft famously made a run at merging its online businesses with Time Warner's AOL a few years ago. As with its recent talks with Yahoo, Microsoft only succeeded at driving its target into Google's arms; Google has a search deal with AOL, and owns 5 percent of the company. Could AOL be an option once more for Microsoft? Time Warner CEO Jeff Bewkes is set to take the stage soon. While he's not likely to say anything about talks, it's a safe bet Vigil and Grant will be seeing more of each other.

Is disgraced stock analyst Henry Blodget the reincarnation of Howard Hughes? In an inadvertently revealing Silicon Alley Insider post explaining his dislike of Windows Seven's touchscreen features, Blodget's screaming germophobia is on full display.

"Guys like us avoid monopolies. We like to compete." — Microsoft chairman Bill Gates, whose company remains under antitrust supervision, at the All Things Digital conference Tuesday.

In this clip, excerpted from Walt Mossberg and Kara Swisher's interview with Microsoft chairman Bill Gates and CEO Steve Ballmer at the All Things D conference down in Carlsbad, Ballmer explains how Gates hired him during his first year at Stanford business school. Ballmer says Gates called him up and lamented the fact that he "didn't have a twin" he could hire to work at Microsoft. The best part of the tale? Ballmer's voice impersonation of Gates on phone — all squeaky and high-pitched — with his Gatesness sitting right there.

BusinessWeek's Gene Marcial got his Microsoft and Yahoo sources to talk, but they didn't say very much. "Something will definitely happen soon," Marcial quotes "one of the people involved in solving Yahoo's conundrum." Marcial writes that sources say Microsoft still wants to buy Yahoo outright, although its also considering purchasing just Yahoo's search business. More sources say that if a Microsoft-Yahoo full buyout doesn't happen, Yahoo will outsource search to Google. That deal could be exclusive or it could be non-exclusive, sources tell him. In short, Marcial and BusinessWeek report nothing new. But don't let that stop BusinessWeek from featuring an air-brushed image of the silver fox in his pinstriped suit and silver tie on its home page. No, really. Don't let it. Rowr.

Microsoft CEO Steve Ballmer believes the online advertising market will reach $40 billion this year and grow to $80 billion by 2010. Last year, Microsoft earned only $2 billion from it. Google claimed $8 billion. This disparity upsets Ballmer and so he's put his man Kevin Johnson to the task of remedying the situation. Since most of Google's revenues come from search marketing, Johnson's first plan is to acquire more search queries for Microsoft. Hence the bid to acquire Yahoo, or at least its search business. But Johnson knows more search queries for Microsoft won't unseat Google alone, and so his second step is convince advertisers that Google's search advertising isn't worth all the money they spend on it. To make that argument, Johnson will rely on a tool Microsoft acquired when it purchased aQuantive last year: engagement mapping, a system that will tell vendors which ads consumers saw on the Web before they purchased a product.

After being kicked out of D6 — kicked out of mere proximity to D6, really — I learned I didn't miss much. Want a summary of Bill Gates's presentation at D6 of Windows Seven, Microsoft's supposedly exciting new operating system with multitouch features similar to the year-old Apple iPhone? "Windows Seven is bullshit," says Gizmodo editor Brian Lam. Here's to more insights like that at the Four Seasons hotel bar! The highlights reel, in case you're in doubt:

To come up with the estimated pay for tech's 10 worst entry-level jobs we spoke to former and current employees, HR reps and friends of friends working these jobs. But still, some of our commenters expressed disbelief over the salary estimates. "80 grand for an entry level job? Time to apply and kick those whiney losers out! Let's see how they feel about their new job bagging groceries at the Safeway," wrote mwbeeler. Loakim said:

CARLSBAD, CA — Next month, Bill Gates is retiring from his day job at Microsoft. That means his appearance tonight at the D6 conference is his last hurrah. To go out with a bang, he is debuting Windows Seven, John Paczkowski reports on the conference's AllThingsD website. Details are scant, but we've heard Microsoft was rushing out Seven to make up for the failures of Vista. Gates, Paczkowski writes, will demonstrate an "all new user interface." Which speaks to Microsoft's problems. Users are not demanding new interfaces; corporations are uninterested in retraining their staffs, and consumers are unmotivated to learn the quirks of a new operating system. Gates would have been better served by simply improving the operating system's reliability and performance — but that does not make for an interesting show.

Nearly a quarter of business school graduates surveyed said the number one company they want to land a job at is, unsurprisingly, Google — what with the pools, hair cuts, massages, legendary cafeteria and valuable stock. Other tech companies included Apple in fourth, Microsoft in twelfth and Amazon in 23rd place. For you managers of the future looking to get an interview with Steve Jobs, the school Apple recruits most heavily at is Stanford, followed by the Massachusetts Institute of Technology, the University of Michigan and the University of Chicago. [Fortune] (Photo by Sam Pullara)

Why didn't Microsoft CEO Steve Ballmer follow through on his threat to take his $33 per share offer for Yahoo to its shareholders? Because Microsoft chairman Bill Gates tapped the brakes, reports Kara Swisher. "Numerous sources" say Gates didn't want a Yahoo merger as a way to solve Microsoft's online problems, but figured as CEO of the company, Ballmer should have free rein.

In the '90s, Washington PR firm Chlopak Leonard Schechter pushed anti-Microsoft information that its client, Oracle, had obtained through hiring investigators to rifle through garbage. Now working for Google, Chlopak is taking a greener approach: It's reusing Google-friendly quotes already aired in the press as fill-in-the-blank quotes for other journalists. Chlopak flack Rob Haralson does not note that the quotes, which support Google's proposed deal to take over Yahoo's search advertising, mostly come from Google executives or lawyers speaking anonymously. Still, Haralson may not be acting as strategically as he thinks. The quotes portray the deal, which is facing antitrust scrutiny in Washington, as no more significant than a supplier providing parts to a PC maker. That may not be a particularly good analogy — has Haralson ever sat in on an Intel negotiation? Google's recycled arguments:

Microsoft's iPod imitator, the Zune, will no longer be sold at videogame and electronics retailer GameStop according to GameStop CFO David Carlson. They probably need that space for Grand Theft Auto IV, which has sold more copies in a few weeks than Microsoft's portable media player has sold since launch. [Digital Daily]

"If we have 10 percent better connectivity in the U.S., we get 10 percent more revenue in the U.S.," Google cofounder Larry Page told the FCC. He argued in short, that what's good for Google is good for America, speaking in favor of opening unlicensed spectrum known as "white spaces" between television broadcast frequencies. The National Association of Broadcasters and major sports leagues are opposed to the measure, with the NAB citing the FCC's failed tests of equipment made by Microsoft in 2007.

Like the rest of us, Yahoo's negotiators don't understand what Microsoft CEO Steve Ballmer means when he says Microsoft wants to acquire just Yahoo's search business. Board members, fearing corporate raider Carl Icahn and his friends, would now prefer a full merger. Microsoft would be down with such a deal, except CEO Ballmer and company worry Yahoo cofounder Yang and Filo still won't accept a bid for less than $37 a share. We don't buy this excuse, if only because we've heard Yang and Filo don't have much say over negotiations anymore. Not after the high-fives.