The fallout over Microsoft’s (MSFT) collapsed bid to acquire Yahoo (YHOO) has provoked all sorts of hand-wringing about why the deal failed. Yahoo’s stock was up almost 6% Tuesday because Jerry Yang told The New York Times and The Wall Street Journal that he really was willing to do a deal.

But is he? And is he still, which the stock move would imply? I received a passionately argued note Monday from Drew Ianni, who runs programming for ad:tech expositions, whose conferences have become must-attend events in the online advertising industry. I thought it’d be worth publishing his musings in their entirety:

The collapse of Yahoo’s stock price was a widely predicted occurrence in that if the deal collapsed the market correction for Yahoo! is ultimately a non-event as Yahoo’s market value simply returns to the level before the dance with Microsoft.

The more interesting question is why did this deal collapse? None of us have been privy to the conversations between Microsoft and Yahoo. But from my perspective, this deal failed not because of any business related issues or price but because of culture.

Once again, Microsoft has proven that it simply does not understand the culture of Silicon Valley. Microsoft has a long track record of abusing its power in its attempts to destroy Silicon Valley companies. From Apple (AAPL) in the 80’s to Netscape in the 90’s to Yahoo and Google (GOOG) today.

These and other companies are part of the fabric of the Valley, have given it its lifeblood and represent the traditions and rich heritage of what the Valley is about. Those who seek to destroy this ethos are not looked fondly upon in Northern California, and Microsoft has long been at the top of that list. If you have been the schoolyard bully for 20 years and wake up one day to find that you have no friends - especially when you most need one - and no one wants to play with you, don’t be surprised.

And the public trashing of Yahoo and threats of proxy battles only made matters worse. Business is cut-throat in the Valley but it is rarely publicly cut-throat. Battles are fought behind closed doors and within relatively narrow circles. And the public airing of dirty laundry is considered unseemly and without tact. If Microsoft wanted to buy Yahoo, Steve Ballmer should have asked Jerry Yang out for coffee at Buck’s in Woodside instead of disrespecting him personally, the company he co-founded and help build, and the greater Silicon Valley.

This deal was never going to happen and the only reason there were conversations is because Yahoo faces some serious long-term issues. But even with a remarkably generous offer that simply cannot be matched by any other company, Yahoo chose to go it alone. That’s what most of us would do if we were publicly disrespected. It was looking like the arrogance of Microsoft would simply cost them a few extra billion dollars. But it ultimately cost them the entire deal.

I think Drew is on to something. There’s no question that there wasn’t a culture fit.

Having said that, I think Drew’s wrong. People talk endlessly about how Silicon Valley is different. Guess what? The laws of gravity apply here too. And this battle isn’t over.

I wrote Friday about the daunting math that Microsoft (MSFT) suddenly faced if it didn’t significantly boost its stake in Yahoo (YHOO). In short, though Yahoo insiders and generally supportive institutions control less than 40% of Yahoo’s outstanding shares, they easily control a majority of shares likely to be voted in a hostile proxy contest. Average Joes rarely vote in such fights, boosting the power of the pros. Why Microsoft’s bankers at Morgan Stanley didn’t figure this out sooner — or why CEO Steve Ballmer didn’t listen — is one of the intriguing tales that may yet be told.

As of the opening bell Monday morning, however, the math changes immediately. There were reports over the weekend of high fives among the Yahoo senior management group. With Yahoo shares down almost $6 to $23 in early trading, there’s a new calculus. Now the shareholders who urged Jerry Yang to reject Microsoft just watched $14 billion evaporate, the difference between Yahoo’s current price and the $33 Microsoft said it was willing to pay.

Some quick thoughts as the story develops:

* How much director’s and officer’s insurance does Yahoo have? They’re going to need a lot. Bill Lerach may be a convicted felon now, but others will take his place, and Yang & Co. just made a decision on behalf of the owners of Yahoo to walk away from a ton of money.

* The ultimate irony of all this is that Steve Ballmer’s main goal in buying Yahoo was to keep its advertising inventory out of the hands of Google (GOOG). Though a Yahoo-Google arrangement is going to require tough-to-secure regulatory approval, Microsoft’s mishandling of the bid has effectively driven Yahoo into Google’s arms. At least for now.

* This doesn’t leave Yahoo in a position of strength. Listen to how UBS analyst Ben Schachter describes the situation to his clients:

“While we believe there are 3 potential near-term catalysts for the stock (partial outsourcing of search to Google, unlocking the value of its Asia assets, potentially deeper cost-cutting in non-core businesses), Yahoo!’s execution remains the problem, as the company has not been able to execute better targeting and measurement on its own site effectively enough over the past 15 years. We are not willing to give them the benefit of the doubt that they can make meaningful improvement over the next three years, particularly given a heightened competitive dynamic where Yahoo! will now be competing against Google, Microsoft, AOL, and possibly others.”

* Where does Microsoft shop next? The party line is that there’s nothing else big enough for Microsoft to buy. Yet it has a war chest of $44 billion ready to go. Will it make Facebook an offer it can’t refuse? Could it be the solution for AOL that Time Warner (TWX) is looking for? Will Microsoft try again if Yahoo shares remain stuck in the mud?

* What will happen to Yahoo’s board? Now Yahoo has to schedule a long-delayed annual meeting. (Google’s is this Thursday, by the way.) Will angry shareholders kick out its value-destroying board?

All week the Microsoft (MSFT) camp has been leaking to the media that it’s on the verge of launching a hostile takeover of Yahoo (YHOO). Yet as I prepare to hit “publish” (what used to be called “going to press”), still no word. Could it be that Microsoft has realized it can’t win a proxy battle?

Consider some math. According to public filings, various entities of Capital Group own as much as 16% of Yahoo’s outstanding shares. Legg Mason (LM) owns another 6%. Founders Jerry Yang and David Filo together have kept a 10% stake all these years. Directors, top executives and various friends of Jerry and David’s own at least another 5%. That adds up to 37%. And that’s not counting the other institutions that own shares of Yahoo. That 37% alone, though, absolutely will vote against a hostile takeover attempt at $31 per Yahoo share (Microsoft’s original offer), and are highly unlikely to approve a $33 offer either.

Okay, you say, 37% does not a hostile takeover thwart. True, but consider this. Yahoo is a consumer company, and many of its shares are held by retail investors, perhaps as much as 25%. Retail investors almost never vote in proxy contests. It’s just not in their nature. Too much trouble, not enough impact, and so on. So for the sake of argument, remove that 25% from the vote count. Now that 37% of Yahoo stalwarts all of a sudden becomes 49% of the votes outstanding. There are a lot of ifs and mights and at leasts here. But the bottom line is obvious. Team Yahoo wouldn’t have to work all that hard to block a deal anywhere south of, say, $36 a share, while Team Microsoft has a huge task ahead of it to find enough votes to win.

I’ve assumed from the beginning that this deal is inevitable. I still think so, meaning that Steve Ballmer will bite down hard and come up with more money to buy Yahoo. And perhaps by the close of market my math will be proved irrelevant and Microsoft will launch an attack. Marc Andreessen wrote this morning about many of the concerns each company might be having about a deal right now. Good points all. What he’s left out is that Microsoft just maybe has realized it can’t win.

The Wall Street Journal ran an interesting interview with Intel (INTC) CEO Paul Otellini the other day. A few things stuck out. First, in the three years Otellini has run Intel its headcount has dropped from 103,300 to 84,600, according to the Journal.

He also talked a lot about supplying chips to Apple’s (AAPL) iPhone, a no-brainer given that Intel has been a success displacing IBM (IBM) as a supplier of chips to Apple’s Macintosh computers. Otellini also reiterated what’d he’d told investors when Intel recently reported a better-than-expected first quarter, that Intel hasn’t seen any ill effects of a weak U.S. economy, or if there have been any they don’t “move the needle.”

Here’s what’s interesting about all of that to me. Exactly three years ago I wrote an article in Fortune about Intel and Otellini, who was new on the job at the time. I noted then that Intel’s stock price had been stuck for a while at $23, about where it had been in 1998. Intel’s close Wednesday: $22.26.

Yes, Intel pays a 56-cent-per-year dividend, up from 32 cents in 2005, so its total return is better than nothing. But check out its chart compared to the Nasdaq’s in the same time frame. Not pretty. The reason is simple. Yes, headcount is down, but so are revenues and profits.

In 2005 Intel had revenues of $38.8 billion, profits of $8.7 billion and earnings per share of $1.40. Last year the corresponding figures were $38.3 billion, $7.0 billion and $1.18. (An Intel investor-relations site has all these figures and more for the curious.)

If anything, Intel trades for a higher valuation to its earnings today than it did three years ago, though that’s got to be of small solace to its investors. As for its goal of supplying the iPhone, that’s aspirational. What the Journal interview hinted at but didn’t make clear is that Intel doesn’t supply the guts of the iPhone. In short, it’s no closer to its goal of moving “beyond the PC” than it was three years ago.

As for the economy, Otellini identifies the migration from desktop computers to notebooks as the reason Intel’s business has held steady. Still, Otellini has to move the needle in an entirely different way: Like Jeff Immelt at General Electric (GE), he’s got to get that stock up.

Rich Barton is one busy guy. An ex-Microsoft (MSFT) exec and a founder of Expedia (EXPE), he’s currently chairman and CEO of Zillow.com, the most voyeuristically interesting Web site in the real estate business. On the side he’s also a director of Netflix (NFLX) and the children’s-advocacy group Common Sense Media; a partner with some Seattle buddies in a $10-million, quant-jock hedge fund the group plans to expand by taking outside money; a venture partner at Benchmark Capital; oh, and a founder of two new startups, Avvo.com and an unlaunched company called Glassdoor.

Barton also is disgustingly relaxed, as I learned when he dropped by my office Tuesday morning, mostly to talk about Zillow. If you don’t know Zillow, which is based in Seattle, first read Jeff O’Brien’s rollicking cover story last year in Fortune. It explains how Zillow has attracted a wide audience of titillated homeowners and shoppers who like to check on Zillow’s “Zesstimates” of the value of just about any home in America. To hear Barton tell the tale, the company continues to rock. Unlike every other real estate Web site, Zillow is a pure media company. Its only goal is to sell advertising, and it’s doing that with an increasing drumbeat of ingenious creations. Jeff wrote last year about Zillow’s “Make Me Move” feature, where homeowners edit Zillow’s listing of their own house and then taunt the curious to make them an offer they can’t refuse. Since then the company has added catchy ideas like a mortgage marketplace, where prospective borrowers anonymously post their needs and lenders publicly state their terms. Another new feature is “Dueling Digs.” I’ll just describe it as the Hot or Not of real estate and let you check it out for yourself. (Watch for a related “home improvement” section to be Zillow’s next practical, as opposed to entertaining, site feature.)

So how’s Zillow doing? “It has embedded itself into the process of real estate,” he says, with about the amount of modesty you’d expect from someone with his list of accomplishments. Barton says the company had 5.2 million unique visitors to the site in March, according to internal logs provided by Omniture (OMTR), whose numbers typically are higher than third-party ratings. Two million homes are for sale at Zillow, thanks to the site having won over real estate agents happy to accept its free services. It sports advertisers include homebuilders like Lennar (LEN), Verizon (VZ) (which advertises only to areas it serves with the specific service it is promoting on Zillow), and Deere (DE), for whom Zillow tailored an ad program that appears only on homes whose acreage justifies the purchase of a riding mower. That’s not only freaking smart, it’s a perfect example of the kind of targeted advertising the Web delivers better than any other medium.

Zillow also sells ads the same way everyone else does, through Google’s (GOOG) publisher network, AdSense, as well as with a national sales force. Barton says the 150-person company isn’t profitable yet but that he can “see profitability.” He has raised a total of $87 million from an investor list that includes Benchmark, Technology Crossover Partners, the Boston hedge fund PAR Capital Management, and Legg Mason (LM), whose behind-the-scenes investing guru (and ex-journalist) Randy Befumo has an observer seat on the Zillow board.

As Barton prepares to leave, I do wonder aloud if the housing downturn won’t render Zillow a bit player. Unsurprisingly, he’s ready. “We think people are spending more time online shopping for homes now,” he says, noting that the end of the frantic days of bidding on homes immediately or losing out play to a Web site’s advantage. But what if, I ask, the great homeowning game of the last few decades has played out, if we go back to being a nation of some owners and many renters? “Shelter is primal,” responds the entrepreneur, for whom starting companies clearly is just as ingrained.

As the great credit crisis of 2007-2008 finally begins to lose steam, most people still don’t understand what the heck happened. For good reason. It’s confusing stuff. The terminology is complicated. The people aren’t well known. The pieces move around quickly.

To the rescue comes Roger Lowenstein, author of When Genius Failed and, significantly, a fine article in this past weekend’s New York Times Magazine. In a nutshell, Lowenstein explains methodically, and in some of the simplest declarative sentences you’ll find written in business journalism, how conflicts of interest at the credit-rating agencies — Moody’s (MCO), S&P (MHP) and Fitch — misled investors in mortgage-backed securities.

The conflict is straightforward, and I’ve written about it here before: The agencies make most of their money from fees paid by bond issuers and their banks rather than from the investors who rely on the ratings. Lowenstein neatly dismisses the credit agencies’ explanation that they did the best they could with the information they had at their disposal. In a pivotal passage, Moody’s walks readers through an actual portfolio of subprime mortgages that was packaged by an investment bank and rated by Moody’s. The actual names are obscured as “Subprime XYZ,” which is how Moody’s was willing to share the illustrative example with Lowenstein. Consider this passage:

The loans in Subprime XYZ were issued in early spring 2006 — what would turn out to be the peak of the boom. They were originated by a West Coast company that Moody’s identified as a “nonbank lender.” Traditionally, people have gotten their mortgages from banks, but in recent years, new types of lenders peddling sexier products grabbed an increasing share of the market. This particular lender took the loans it made to a New York investment bank; the bank designed an investment vehicle and brought the package to Moody’s.

Moody’s assigned an analyst to evaluate the package, subject to review by a committee. The investment bank provided an enormous spreadsheet chock with data on the borrowers’ credit histories and much else that might, at very least, have given Moody’s pause. Three-quarters of the borrowers had adjustable-rate mortgages, or ARMs — “teaser” loans on which the interest rate could be raised in short order. Since subprime borrowers cannot afford higher rates, they would need to refinance soon. This is a classic sign of a bubble — lending on the belief, or the hope, that new money will bail out the old.

Moody’s learned that almost half of these borrowers — 43 percent — did not provide written verification of their incomes. The data also showed that 12 percent of the mortgages were for properties in Southern California, including a half-percent in a single ZIP code, in Riverside. That suggested a risky degree of concentration.

On the plus side, Moody’s noted, 94 percent of those borrowers with adjustable-rate loans said their mortgages were for primary residences. “That was a comfort feeling,” Robinson said. Historically, people have been slow to abandon their primary homes. When you get into a crunch, she added, “You’ll give up your ski chalet first.”

This shows Moody’s understood full well that the mortgages were all subprime. This means
that, by definition, the mortgage holders had inferior credit, and that a giant percentage didn’t supply documentation to back up their income claims on their mortgage applications. Moody’s and others say they were victims of fraud. Yet they’ve admitted to Lowenstein that they were willing victims of fraud. A final note to Claire Robinson, the veteran Moody’s executive quoted at the end of that passage: People who can’t afford prime mortgages typically don’t have ski chalets.

It’s worth taking a step back here and asking what can be done about the conflict. I met Monday with Bill Hambrecht, the founder of the old Hambrecht & Quist [now part of JPMorgan Chase (JPM)] as well as his current firm, the dutch-auction promoter WR Hambrecht + Co. He told me it’s not simply that the ratings agencies curry favor with the banks. It’s also that the analysts at the agencies, who might make in the neighborhood of $100,000 a year, cozy up to the bankers they meet with because they’re interested in going to work for the banks, where they can earn a lot more money. Hambrecht’s solution: Empower the government to rate bonds, especially if the government requires certain kinds of fund managers to own only officially-rated bonds. Lowenstein, by the way, comes to essentially the same conclusion, though he doesn’t directly advocate a government-run ratings regime.

We had a busy week just last Monday and Tuesday at Fortune’s green business conference in Pasadena, Calif. There’s been a ton of coverage of what went on, especially the launch of an all-electric car, the Think City, in the United States by the Norwegian company Think Global and its North American investing partners, Kleiner Perkins and Rockport Capital. I moderated six panels at the conference, and though it took me a few days to mop up afterward, I thought I’d offer a few thoughts on each. The one comment I heard most frequently at the conference was how pleased the business people there were to find environmentalists willing to have reasonable conversations with them about solutions to the global climate change problem, and, conversely, how excited the enviros were to find so many high-level business types (not just the ghettoized “corporate and social responsibility” types) taking the conversation so seriously — all under the Fortune banner.

1. Think. What was particularly cool about the Think launch is that the Think crowd, let by CEO Jan-Olaf Willums, brought two cars with them to Pasadena, one of which was available for test drives. I drove one, and liked it a lot. It can go 65 miles an hour and travels 110 miles before the battery needs to be re-charged. Think is an involved story. Willums, a repeat entrepreneur, bought the assets of the company out of bankruptcy from an investor group that in turn had bought them from Ford (F), which had sunk $150 million into developing Think before abandoning the project.

Today, the company is sprinkling a handful of cars around Europe. Then it will see if it can crack the California market. Rockport Capital partner Wilber James, who sported the only handlebar mustache at the conference, got into Think Global a couple years ago. He holds his own with Ray Lane, the ex-Oracle executive who is staking his investing career on a big play in electric cars. Other than Think, Lane has invested Kleiner’s money in Fisker Automotive (currently involved in a “ridiculous” suit — Lane’s words — with Tesla Motors, which says Fisker founder Henrik Fisker stole their ideas) and a third company he won’t identify.

As far as the U.S. is concerned, Think is more show-and-tell than anything. The cars won’t hit the road until 2009 at the earliest, and the partners haven’t worked out pricing, who their electric-utility partners are going to be (utilities love the idea of electric cars) or even where the vehicles will be manufactured. Having said that, the car is innovative. Think plans to sell the car but lease the battery on the thinking that battery costs will equate more in the buyer’s mind to gasoline prices. I’m in the target market: urban dwellers with short commutes who aren’t hung up on luxury trappings. I’d love to have one. Hurry up guys!

2. “Clean” coal. Before lunch on Monday I hosted a roundtable that asked if clean coal is an oxymoron. It was easily the most intense and enjoyable event of the conference for me. I’ll boil down the argument into two camps. Camp one: the coal industry, led by David Crane, CEO of the coal-powered utility NRG (NRG) and John Lavelle, president of General Electric’s (GE) business that sells equipment to coal plants to trap and “gassify” their carbon dioxide emissions. Camp two: mainstream environmental groups who want to encourage industry to do the right thing, led by David Hawkins of NRDC and Fred Krupp of EDF. Bitterly opposed to them were Mike Brune of the Rainforest Action Network, David Roberts of Grist.org (who had a ton to say about the conference at the Gristmill blog) and, though he didn’t overtly say he was against clean coal, Saul Griffith of Makani Power, a super-interesting MacArthur “genius” and entrepreneur.

Proponents of clean coal argue that coal is here to stay, that the Chinese and Indians are growing their coal capacity faster than the U.S. is, and that the best solution is to spend on technology to achieve the goal of clean coal. The opponents argue that even a dime spent on anything other than renewable fuels is misspent and furthermore that coal denudes mountaintops, gives people cancer and otherwise ruins life as we know it. Despite my caricatures of characterization, each side made compelling arguments. It was fascinating.

3. Wall Street and climate change. On this panel I had various executives from Bank of America (BAC), Goldman Sachs (GS), JP Morgan Chase (JPM), Lehman Bros. (LEH) (the banker with the best name in the biz: Theodore Roosevelt IV), and Ceres, a firm that advocates for socially responsible investing on behalf of oodles of dollars of pension-fund and endowment money. The gist of this panel was that Wall Street is incorporating global warming into its normal shtick, be that giving investment advice, attacking a lucrative market or encouraging its clients not to be polluters. There’s a bit of a feel-good patina to this, in my opinion. “Green” to the investment banks isn’t really that different from, say, steel or chemicals, in bygone eras. It is a PR opportunity, however, and it’s also a net positive that these influential firms are thinking about and doing the right thing, at least as they see it and as best as they can.

4. The skeptical environmentalist. Another highlight of the conference for me. I interviewed onstage Bjorn Lomborg, a Danish political scientist and statistician who is one of the leading voices against the mainstream approach to combating global warming. It’s way too tough to boil down Lomborg’s philosophy in a paragraph. But I’ll try. He thinks global warming is real and man-made, but he thinks it’s not nearly the greatest crisis facing humanity (world hunger, for example, would rank higher in his book), and he believes policies like the Kyoto protocol or proposed cap-and-trade schemes pending in the U.S. Congress are wastes of time and money. Lomborg has written two books on the subject, The Skeptical Environmentalist and Cool It.

In general, he’d rather see money invested in technology to combat global warming than regulation that enforces behavior that won’t greatly affect the problem. Lomborg is extremely controversial. Most environmentalists hate the guy. They think he’s a liar, that he fudges the facts and that he’s a toady of the “deniers,” people who believe global warming doesn’t exist. The write-up David Roberts did of my interview gives you a good sense of that perspective. I happen to think Lomborg makes a lot of sense, and that his perspective is totally worth considering. Even if you believe that global warming is an abject crisis, I simply reject the argument that it’s a bad idea to test your beliefs by listening to someone who disagrees or who is proposing a different solution. Check out an admittedly self-serving take by the noted entrepreneur Bill Gross, who was early, as he often is, to the green game.

5. Vinod Khosla. The famed venture capitalist was on his game for a 20-minute interview with me Tuesday morning. Khosla, who struck out from Kleiner Perkins to start his own firm, Khosla Ventures, also was one of the early Silicon Valleyites to get that green was going to be a big money-making opportunity. He’s built a portfolio of some 40 companies, one of which makes corn ethanol, a product currently derided by just about everyone (other than Midwestern farmers and Archer Daniels Midland (ADM) ) as doing nothing for the environment and driving up food prices in the process.

Khosla isn’t backing away from his support for all kinds of biofuels. He thinks biofuels are a distant fourth in the blame game for rising food prices, behind soaring demand, drought in Australia and rising fuel prices themselves. He pooh-poohs hybrid cars, calling Toyota’s (TM) Prius a good example of “greenwashing,” and said that while most of “clean coal” is bunk he is interested in next-generation coal sequestration technology. That’s the process of sticking the bad stuff into the ground, and to get a handle on its rating on the controversy meter, think about the old debate on spent nuclear waste rods. David Roberts also liveblogged my interview. Todd Woody covered it too.

6. Investing on green. For my final panel, I brought up four people who are earning their livings trying to make money on the green craze, as opposed to people whose jobs are a mix of doing good and doing well. The four were Dave Edwards, the “clean tech” analyst at Morgan Stanley; Erik Straser, who has built an investing practice solely on the subject at Mohr Davidow; John Small, who spends about half his time on green investments for the giant hedge fund company GLG Partners (GLG); and Martin Whittaker, an investor with the private-equity fund MissionPoint Capital Partners.

A very short takeaway from this panel is that despite all the noise, this field is incredibly young. There aren’t that many public companies in which to invest. That’s why solar-panel makers like First Solar (FSLR) have been so volatile: 52-week range of $54 to $308; currently at $286. As Straser noted, green tech hasn’t yet had its “Netscape moment.” I’d love to have all four back on stage next year for a progress report.

Some other random comments from the conference. Microsoft (MSFT) has a chief environmental strategist now, and he happens to be a friend of mine, Rob Bernard, who has been with Mr. Softee for more than a decade. I did a video interview with Rob that explains what a software company’s environmental strategist does … The environmental crowd is a lot of fun. I loved going to a Fortune conference and seeing lots of people I didn’t know…The food at our conference was amazing!

Someone I respect a lot thought my article in the current issue of Fortune about Gil Amelio’s latest venture was “a bit heavy-handed and gossipy.” The article, “A SPAC That Went Splat,” is about a special purpose acquisition company, also known as a blank-check company, organized by some prominent Apple (AAPL) alumni from yesteryear, including Amelio, longtime IBMer (IBM) Ellen Hancock and co-founder Steve Wozniak.

You can read my piece and judge for yourself its relative heavy-handedness, which I interpret to mean my having been unkind to Amelio, as well as whether or not the article is merely gossipy, again, which I suppose is a way of saying it is titillating yet trivial or irrelevant.

I’ve already mentioned that I respect my critic quite a bit, so I thought about the criticism. Unsurprisingly, I respectuflly disagree. This story is important because it’s one of managerial hubris and investor naivete. Amelio and his crew spun a tale of newfangled convergence and then went out and bought a plain-vanilla dog of a semiconductor company. Investors, wowed by big names and their association with an unqualified success — that would be Apple — forked over $176 million for Amelio’s SPAC. (It’s worth about $14 million today.) Never mind that Amelio hadn’t been at Apple for 10 years, that Wozniak had been gone longer and that Hancock’s last big effort was a Web hosting company that went kaplooey.

SPAC’s have an alarming level of respectability these days. Yet all they are is a bet on a management team. (My colleague Jennifer Reingold explained last year how they work here.) They’ve been called poor-man’s private equity firms, but even the worst private-equity shop makes numerous bets, not one, as a SPAC does.

Andrew Ross Sorkin recently wrote an entertaining column in the New York Times about one prominent SPAC. He ended with the observation that only one prominent investment bank, Goldman Sachs (GS), so far had stayed away from underwriting SPACs.

Exactly a month later The Wall Street Journal reported that Goldman will enter the field , though with a slight twist. It will allow management to own only 10% of the purchased company, rather than the typical 20%. As if that makes the whole thing virtuous.

Is it heavy-handed and gossipy to expose how management enriches itself, generates fees for investment bankers (including, potentially, the high and mighty Goldman Sachs), and pulls one over on investors?

I think not.

Frank is back.

Frank Quattrone, Silicon Valley’s most powerful investment banker in the 1980s and 1990s, picked a moment of maximum market turmoil to announce that he’s back in business. Yet despite predictions he’d start a private-equity firm, Quattrone instead is returning to his first love, straight-on investment-banking services to high-technology firms. His new outfit, Qatalyst Group, will start as a six-partner boutique in the mold of Greenhill & Co. (GHL), Evercore Partners and Moelis & Co., all firms started by former bankers at high-profile firms.

Another prediction that didn’t pan out: Quattrone’s new firm won’t include his former partners, George Boutros and Bill Brady, who together with Quattrone dominated the tech banking world for more than a decade as the team traveled from Morgan Stanley to Deutsche Bank to Credit Suisse, where Boutros and Brady remain. His five founding partners at Qatalyst are a group of 20- and 30-somethings, each of whom worked with Quattrone at Credit Suisse, though none was there immediately before joining Quattrone. The five are Jonathan Turner, 34, a former Internet banker and most recently a biz-dev executive at the online marketing company QuinStreet; Adrian Dollard, 38, the firm’s general counsel; Neil Chalasani, 29, who did a stint at Evercore; Brain Slingerland, 30, who decamped to Goldman Sachs after Credit Suisse; and Brian Cayne, 26, who came from Vista Equity Partners.

For a while, it looked like Quattrone’s name would be linked with the likes of Dennis Kozlowski and Jeffrey Skilling, both of whom are doing time in jail for crimes committed during the market mania that surrounded the dot-com craze. Yet Quattrone’s conviction on obstruction of justice was overturned and he was fully exonerated in 2006. He says he’d been thinking about starting a private-equity firm but decided instead to focus on what he knows best. “I’m more of a growth guy and a strategy guy,” he said, during a Tuesday-morning interview from his firm’s temporary offices in San Francisco.

For all the negative press Quattrone got during his trials, his support base in Silicon Valley remained remarkably strong. It showed in the big hitters he lined up for his firm’s inaugural news announcement. Google (GOOG) CEO Eric Schmidt, Intuit (INTU) Chairman and Valley consigliere Bill Campbell, Facebook investor and venture capitalist Jim Breyer, and Facebook CFO and former Yahoo (YHOO) treasurer Gideon Yu each lent their names to enthusiastic testimonials.

Quattrone says the new firm has no clients yet as it awaits approval of its broker-dealer registration, a process that could take up to six months. In the meantime, Qatalyst will operate as a division of JMP Securities (JMP), much the same way former UBS banker Ken Moelis operated initially as part of Mercanti Securities. Indeed, Moelis is more than a role model for Quattrone. He’s an example the kind of business Qatalyst hopes to win. Moelis currently is advising Yahoo on its defense of a Microsoft (MSFT) takeover bid, precisely the kind of assignment Quattrone wants to be in the position to take on. Qatalyst also will raise a fund for investing alongside its clients, though Quattrone says that initially the money will come from himself and his partners.

Quattone says that after some “soul searching” he realized that he doesn’t miss the empire-building and “liasing” with New York, Germany and Switzerland that went along with running outposts of major banks during the years he and his team backed iconic companies like Cisco (CSCO), Netscape and Amazon.com (AMZN). What he misses, he says, is giving “good, old-fashioned, honest advice.”

While Quattrone has been taking time to reflect, of course, his former minions have sprinkled themselves throughout Wall Street. Watching him and his new young recruits compete against them will provide some good, old-fashioned fun in Silicon Valley.

With only a wee bit of provocation, Mark Hurd raised an alarming prospect Tuesday afternoon: He won’t be the CEO of Hewlett-Packard forever. “It’s important to know when your work is done,” he told me during a 50-minute interview in the conference room across from his corner office at HP’s headquarters in Palo Alto, Calif. “CEOs can stay too long.”

Let’s be clear: Hurd isn’t leaving. Not even close. In short, he doesn’t think his work his done. Unlike Meg Whitman, who famously predicted to Fortune that she’d leave eBay (EBAY) after 10 years — an accurate forecast, as it turned out — he isn’t even offering a guess as to the length of his tenure. Indeed, one of his favorite expressions, “We’ve got a lot of work to do here,” illustrates the point: So long as Hurd thinks there’s more to do he’ll be around.

It’s just that the CEO who may be the best big-company operator in the country is all about making uncomfortable observations that so far have ended up being the right call for his company: Market share isn’t the best goal to shoot for; even good businesses need to be examined carefully (especially their cost structures); and strategy and execution trump vision any day of the week.

Hurd has every right to be satisfied. Largely on the strength of its non-U.S. businesses, HP (HPQ) reported Tuesday that it grew revenue 13 percent in its first fiscal quarter, which ended in January. Earnings jumped 31 percent. Even more importantly, the company raised its guidance for the full year, which ends in October. The midpoint of that range, profits of $3.52 per share, or more than $9 billion, represents a 5 percent increase over what Wall Street had been forecasting. In a rare sign of the market perfectly assimilating new data, HP’s shares had jumped about 5 percent in after-hours trading by the time I sat down to talk with Hurd.

What you see after watching Hurd for a few years, as I have, is that part of his style simply isn’t to be satisfied. Despite nearly three years of focusing on improving the selling process at HP, Hurd says the company is still not good enough at sales. “It isn’t in our DNA,” he says, echoing past comments. He announced Tuesday the company had added 2,000 salespeople in the last year alone. HP’s computer business has improved dramatically, but its famous printer business needs to focus more on high-end systems and has done a poor job of forecasting the high-volume inkjet business. The size of its non-U.S. business currently is a source of great strength, but Hurd says HP needs to invest for more aggressively in selling in its home market. “You should think of HP as a company of transformation with a bunch of mini-transformations within that,” he says.

So the edgy dissatisfaction that has made Hurd such a success is still there. (He pointedly told analysts an hour earlier he was “not happy” by the inkjet performance.) At the same time, Hurd is in his element. HP’s stock price has roughly doubled since he took over in March, 2005. Yet at $46, it trades for only about 13 times forecasted 2008 earnings, the low end of HP’s historic range and a discount to the overall market. That’s both frustrating to Hurd and an opportunity. (He nods his head — and initially says nothing — as I make this observation.) “I try not to get into that dialogue,” he says. “Sectors get multiples, not just companies,” he adds, noting that the IT hardware sector currently is out of style.

Hurd loves to talk business, but there are a few topics he won’t touch. I ask, if Dell (DELL) can get its act together will that will hurt HP? Hurd doesn’t talk about the competition. I’m curious to know his perspective on Microsoft’s (MSFT) bid for Yahoo (YHOO). Both are partners, he notes, and leaves it at that. (On Feb. 13 News Corp. (NWS) announced that Hurd is joining its board, undoubtedly making him even more reticent on the subject than he already would have been.) He completely stays away from the subject of his predecessor, Carly Fiorina, even by implication. He boils down the CEO’s responsibilities to three tasks: setting strategy (not offering a vision); aligning operations and modeling ways to execute on the strategy; get the best team to help the CEO. “There are a thousand distractions that keep you from doing that,” he says. But that’s where the focus needs to be.

So far so good.