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Once again for old time’s sake, the Yahoo-Microsoft 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.”

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Welcome back to Weekend Update, where we showcase some of the highlights from this site over the past week. In the umpteenth round of the old versus new media match, the Associated Press in its annual meeting this week played into the stereotype of the grizzled no-nonsense editor who shakes his fist at the new interweb thing (or was it intertube?) and its feisty friend, Google News, who are running amok on his lawn.

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Sun chairman and co-founder Scott McNealy probably has a good joke or two about the way the company’s acquisition discussions with IBM have gone down, but he won’t he won’t be relating them as CEO any time soon. This afternoon Sun dismissed speculation that McNealy will replace CEO Jonathan Schwartz in the aftermath of the deal’s collapse.

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What’s Yahoo CEO Carol Bartz’s latest thinking on a search deal with Microsoft? Your guess is as good as any because Bartz isn’t saying. Asked at the Morgan Stanley Technology Conference yesterday whether she favors such a deal, Bartz said she prefers to discuss it in boardrooms, not auditoriums or the media. “I am not going to negotiate with my 55,000 favorite friends,” she quipped.

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QOTD

I don’t want to wind up being known as the Jerry Yang of this market.”

– Microsoft CEO Steve Ballmer on the company’s failure to gain significant traction in search

Yahoo’s financials for the fourth quarter–co-founder Jerry Yang’s last as CEO–were about what you’d expect: mediocre. The fourth was Yahoo’s first money-losing quarter since 2002, and the first time its revenue declined since the fourth quarter of 2001.

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Yahoo, “frankly, could use a little management.” Uttering those words Tuesday afternoon during a conference call to discuss her appointment as CEO, Carol Bartz ushered in a new era at the company. Known for occasionally opening Autodesk executive staff meetings with a “Tell me why I shouldn’t fire the whole lot of you,” she’s no milquetoast. If Jerry Yang was a lower-caps CEO–literally, since he pens staff memos using all lowercase letters–Bartz appears to be his ALL CAPS successor.

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The markets are having their say about Yahoo’s choice of Autodesk Chairwoman Carol Bartz as CEO and they don’t seem to much care for it. Though Bartz is a widely-respected Silicon Valley veteran and has done much to improve Autodesk’s fortunes, investors aren’t so sure she’ll do the same for Yahoo.

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There’s got to be a joke somewhere in the fact that Macworld, the Consumer Electronics Show and the AVN Awards (the “Pornies”) all happen during the same week. Maybe even one that hasn’t been played out 10 times over. All Things Digital was too busy covering two out of three this week to think of one.

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Where are Tina Fey and Sarah Palin when we really need a laugh? In this week ramping up to the holidays, good cheer–unsurprisingly–was hard to find. 2008 may well be remembered as the year the econalypse stole Christmas.

Yahoo was bereft of cheer, for sure. BoomTown covered its long-dreaded layoffs and published Jerry Yang’s complete memo to Yahoo staff about the painful process, which began on Wednesday. Ex-Yahoos from all corners of the company spoke (and vented) to BoomTown about the as-yet fruitless search for a CEO to replace Yang, who laid himself off last month. But wait–Digital Daily pointed out a singular moment of misplaced cheer–akin to fiddling while the proverbial Yahoo burns–as the company, uh, celebrated the holidays with a bafflingly lavish year-end party on last Saturday–four days before layoffs began.

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Come Wednesday, Yahoo will sack some 1,500 employees, depriving them of their livelihoods and turning them into data points on a U.S. Bureau of Labor Statistics unemployment graph. That it will do this amid the worst recession in 50 years is understandable. That it will do it four days after a lavish holiday party is astonishing. Appalling, actually.

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