How quickly things changed. By 2007, Davidson had been joined by 11 other lobbyists, among them a former high-ranking Justice Department antitrust lawyer. And now, two years later, Google CEO Eric Schmidt has been named by President Obama to his Council of Advisors on Science and Technology. In that role he’ll work with a group of distinguished academics and executives–a group that, incidentally, includes Craig Mundie, chief research and strategy officer at Microsoft (MSFT)–to help the administration “formulate policy in the many areas where understanding of science, technology, and innovation is key to strengthening our economy and forming policy that works for the American people.”

Schmidt’s appointment isn’t all that surprising. He served as an informal adviser to Obama during his campaign and he’s a smart guy who’s got some strong opinions about network neutrality, next-generation broadband, and intellectual property–issues that figure high on the president’s tech agenda. Still, it’s one more indication–and the biggest one yet–that Google has become firmly part of the Washington establishment.

But if Yahoo, beaten into submission by irate investors, should suddenly come crawling back to the now empty negotiating table, Microsoft might indulge it, if only for a moment. For now, it’s busy with what Microsoft’s Chief Research and Strategy Officer Craig Mundie refers to as “Plan B.”

“The market may wish that the Yahoo deal may come back together, but Microsoft at least at this point assumes it’s over,” Mundie told Reuters. “Yahoo could always come back again and say, Please buy us for $33 (a share), and I’m sure we might reconsider it, but we’re not assuming that’s going to happen.”

Seems Microsoft, like Yahoo CEO Jerry Yang, is more than willing to listen if the company has anything new to say. And it’s not even facing any shareholder lawsuits …