Wednesday morning, Boomtown opened with the exclusive confirmation we’d all been waiting for: Microsoft’s Bing search engine had inked deals with Twitter and Facebook. The age of real-time is upon us. As if the world weren’t complicated enough, Microsoft (MSFT) opened its own Apple stor… er, Microsoft stores to challenge Apple’s (APPL) retail success. Kara went in like lion and out like Carl Icahn this week with a Friday profile of the mogul. Icahn, activist investor and owner of the world’s best name to precede “haz cheezburger,” quietly left Yahoo’s board this week waving a flag of defeat at CEO Carol Bartz.

Digital Daily took a hard look through the Windows this week. John covered the Microsoft’s release of the new leaner, meaner Windows 7. John’s conclusion: Microsoft’s lucky number could be seven, even if that’s just because it’s anything but Vista. Hopefully they programmed this one with 20 percent more customer goodwill. John reminded us this week that you never can tell what John McCain is going to do next, unless you follow the money. Maverick McCain introduced a bill to prohibit the Federal Communication Commission from implementing the Net neutrality rules it released in recent weeks. Digital Daily wasn’t too surprised to see Sen. McCain take the bold position, as it’s squarely in front of the same telecom industry that has been so generous to him in the past. To round things out, John covered a particularly interesting legal chess game/slap fight between Nokia and Apple. Nokia (NOK) may have sued Apple (AAPL) over cellphone patents, the analysts say, as a way to fend off possible suits in the other direction over Nokia’s multitouch assets.

MediaMemo makes sense of that crazy New York state of mind. That clarity was more valuable than ever this week when Demand Media got in our faces. Peter explained Demand’s model for flooding the net with cheap news stories designed to maximize clicks and add revenue. We’ll have to see how the “content by the numbers” game plays out. In the latest installment of the Condé Nast saga, Peter brought news of a new attempt to grab some of those new media dollars. GQ Magazine will offer its December issue in an iPhone version. This move comes during a round of downsizing all over the Condé empire. While Condé Nast’s strategy seems to be to get users to pay for something they couldn’t get before, it appears that Hulu plans to ask users to pay for something they can currently get for free. Hulu doesn’t know how it will happen yet, but the video service is looking for a way to begin monetizing its vast collection of movies and TV shows. If the company goes with “Hulu Plus” as a subscription option, maybe Peter will get a nod to the naming rights.

Walt spent his column inches this week on the evolution of the Mac. Midweek, Apple released refreshed versions of the iMac and MacBook, as well as the new Magic Mouse. All signs seemed positive with the new products, which feature updates like a larger screen option for the iMac and a rounder, more lovable case for the white plastic MacBook. When Walt went out to check the mail, Mossberg’s Mailbox was again full of Windows 7 questions. Walt discussed some of the new low-vision features in Windows 7, explained the admittedly complicated price points and told readers where to download the operating system.

Katie brought a sparkle to the week with a review of Goby, the self-proclaimed search engine of fun. While she was impressed by the concept, she spotted some gaping holes in search returns, like hundreds of missing events she knew to be on the calendar and others that had already come and gone. Goby might be a great idea, but Katie won’t be relying on it until things like accuracy and timeliness are better addressed.

Weekend Update can make two promises for what’s coming next. First: If it is happening in tech, you will find it at AllThingsDigital. Second: Weekend Update promises to keep the ghost puns to a minimum in the next edition.

Once again for old time’s sake, the Yahoo (YHOO)-Microsoft (MSFT) soap opera in Digital Daily intros, with apologies to Steven Spielberg, Mel Blanc, Queen, Neil Diamond, Barbra Streisand, Tallulah Bankhead, Marlene Dietrich and the entire cast of “The Sound of Music.” (Originally published June 16, 2008.)

So perhaps this means that those talks are about to become more serious still. Time Warner (TWX) CEO Jeff Bewkes did say earlier this month that AOL’s future “will probably get decided fairly soon.”

And if it does and the company is able to ditch AOL on Yahoo? Well, as I’ve said before, Yahoo (YHOO) will no doubt spin such a combination as one that would bolster its domestic market position. But rather than a synergistic powerhouse, a merger of these companies is more like two louts coming together to make one cretin. Not exactly a proven formula, considering recent history. AOL+Compuserve = FAIL. AOL+Netscape = FAIL. AOL+Time Warner = FAIL. AOL+Yahoo?

Yahoo … eventually … in my opinion … they have to do something with Microsoft eventually. They have to do it or Google is going to kill them.”

– Carl Icahn promises Yahoo CEO Jerry Yang an enjoyable board meeting this week.

$36 million. That’s quite a sum, and one that doesn’t even begin to reflect costs in employee attrition, shareholder confidence and other intangibles–Carl Icahn voodoo dolls, company founder cognitive therapy, etc. $36 million to fumble a deal that would have put a premium of more than 62 percent on the share price of a floundering Internet pioneer. $36 million spent on advisory services for an acquisition deal that was well within reach, but never consummated.

$36 million to walk away from $47.5 billion. And we haven’t yet seen costs for July and Yahoo’s (YHOO) annual meeting. That should set the company back another million in uneaten pastry alone.

After the annual meeting, Mr. Icahn will be appointed to our Board. … We’re pleased that both parties were able to work together productively to accomplish this settlement, and we look forward to working with the new Board members and benefiting from their fresh perspective. Yahoo! is now moving forward with one team and one voice, and we’re excited about what the future holds.”

– Yahoo CEO Jerry Yang, July 21, 2008

What a horribly anticlimactic anticlimax. Billionaire backseat driver Carl Icahn has decided not to attend Yahoo’s (YHOO) shareholders meeting Friday. This after months of agitating for the company’s sale to Microsoft (MSFT) and the ouster of its board of directors. “I will not be attending [the annual Yahoo meeting],” Icahn wrote in a post to The Icahn Report. “The proxy fight is over and it will not do shareholders or Yahoo! any good to have the annual meeting turn into a media event for no purpose. … A few days ago, I met with both Jerry Yang and Roy Bostock and I believe both gentlemen genuinely wish that we will be able to work together to enhance value. While we still disagree on many points, I have great hope ‘this will be the beginning of a beautiful friendship.’”

“This will be the beginning of a beautiful friendship.” Really?

Looks like Yahoo is benefiting from Icahn’s “fresh perspective” already.

Hug it out, Sue. Hug it out.

Glass Lewis & Co., however, does not share that opinion. In a report issued Wednesday, the proxy advisory firm recommended getting rid of three Yahoo (YHOO) directors: Chairman Roy Bostock and directors Ron Burkle and Arthur Kern. All three sit on the company’s compensation committee, of which Glass Lewis seems to take a very dim view. From the Glass Lewis report:

Nominees BOSTOCK, BURKLE and KERN all served as members of the compensation committee in fiscal year 2007, during which time the Company paid more compensation to its top executives but performed worse than its peers. The members of the compensation committee have the responsibility of reviewing all aspects of the compensation program for the Company’s executive officers. It appears to us that members of this committee have not effectively served shareholders in this regard. Further, we are concerned that the committee approved the adoption of the Change in Control Severance Plans with potential brobdingnagian payouts, potentially discouraging a takeover.

Additionally, Mr. Bostock serves as chairman of the nominating and corporate governance committee. At last year’s annual meeting, Messrs. Bostock, Burkle and Kern each received over a 31 percent vote against their re-election. In our 2007 Proxy Paper, we recommended voting against each of these directors due to the Company’s excessive compensation practices. We believe this raises concerns about whether the nominating and corporate governance committee is fulfilling its duty to shareholders, considering that all three directors remain on the board. Moreover, we find it disconcerting that Messrs. Bostock and Kern continue to serve on the committee charged with overseeing governance issues for the Company.”

It’s worth noting, as well, that Glass Lewis was not without concerns about Carl Icahn. In its report, the advisory service noted:

Carl Icahn, chairman of Icahn Enterprises G.P. and CEO of Icahn Capital LP, currently serves on a total of seven public company boards. His total number of directorships will expand to eight once he is appointed to Yahoo’s board. We believe that the time commitment required by this number of board memberships may preclude Mr. Icahn from fulfilling his responsibilities to this Company’s shareholders. We believe shareholders should monitor Mr. Icahn’s ability to devote sufficient time and attention to the Company.”