At $12.34, Palm (PALM) is up well over seven percent as I write this, a nice gain that more than offset the four percent drop the company’s shares suffered last week. Clearly, the market is expecting a lot of the Pixi, and according to some analysts, it may get it. In a note to clients Friday, RBC analysts said they “expect positive consumer reception and healthy sell-through,” for the Pixi.

But not everyone agrees with RBC’s cheery assessment. Ashok Kumar, an analyst at Northeast Securities, has a much dimmer view of Palm’s prospects in the months ahead. He says his sell-through checks show a “substantial decline” in recent Pre sales.

“As a fading brand, carriers are likely to see better returns on their promotional and advertising dollars with other vendors,” Kumar writes. “WebOS has negligible smartphone OS share, 0.2 percent per Gartner estimates, and is unlikely to attract any meaningful third-party application support. Palm has bet the farm on webOS and there is a real possibility that they may not achieve critical mass.”

Perhaps. Perhaps not. We’ll see in the months ahead.

“I understand the European Union has a job to do, but the longer this takes, the more money Sun is going to lose and that’s not good. We want to get it done to save as many jobs as we can.”

– Oracle CEO Larry Ellison

The end of Sun Microsystems as an independent company after 27 years is to be prefaced with a bloodletting. And a big one too. The company is sacking some 3,000 employees as it awaits the closing of Oracle’s (ORCL) planned $7.4 billion takeover.

That’s about 10 percent of its workforce.

The cuts, which were disclosed in a regulatory filing today, are to occur in all markets in which Sun (JAVA) has a presence and will be completed over the next 12 months. Sun expects to incur cash severance and other charges of $75 million to $125 million over the next several quarters as a result.

Seems Oracle CEO Larry Ellison wasn’t kidding when he said further delays in approving his company’s deal to buy Sun would cost more people their jobs.

Ugly news for Sun, which has already made sweeping job cuts over the past year, releasing some 6,000 employees into the wild since last November.

Oracle and Sun have not yet responded to requests for comment.

UPDATE: Oracle has declined to comment on the layoffs at Sun.

Which is exactly what Data Domain did.

One consolation: NetApp (NTAP) may have failed as a suitor, but it received a $57 million breakup fee from Data Domain (DDUP) as a result of the termination of the agreement.

Still, it’s a tough blow for NetApp (NTAP), which will now focus on “existing growth opportunities” instead of ill-starred bidding wars with rivals.

Said Dan Warmenhoven, NetApp’s chairman and CEO: “While NetApp’s acquisition of Data Domain would have produced benefits for customers and employees and complemented NetApp’s existing growth trajectory, we remain highly confident in our already compelling strategic plan, market opportunities, and competitive strengths.”

“NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value for our stockholders.” Warmerhoven added. “We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deal’s strategic and financial benefits. NetApp has established leadership positions in virtualized infrastructure, storage efficiency, and unified storage, even in these difficult economic times, by helping customers meet their business objectives with less physical storage while reducing costs. That commitment will not change. We look forward to continuing to build on our foundation of innovation and customer service, and to continuing to execute our successful growth strategy.”

[Image credit: despair.com]

In a speech to reporters at the New York Financial Writers’ Association annual awards dinner last night, the billionaire investor–clearly irked by Yahoo’s latest SEC filing–let loose on the company, accusing it of “sinking to a new low.” Yahoo’s severance plan, which Icahn argues was designed to make any takeover of the company prohibitively expensive, is obscene, said the investor. It’s “an insult to our intelligence … a complete, total … I don’t want to use bad words … a travesty,” he added. For the people Microsoft (MSFT) wants to keep, Icahn maintained, the severance plan “will make it easier for them to leave.” And then, just in case anyone was still unclear on Icahn’s view of the company’s leadership, he offered up the following brief performance review:

Yahoo has done terribly. The board has done an abysmal job.”

Mess with the bull, you get the horns. And if Yahoo’s board persists in messing with Icahn, it may get them in the form of a lawsuit. “If they continue with this line,” the investor told Reuters, “I believe they (the board) may be personally liable.”

Yahoo (YHOO) claims Kozel’s departure, which coincides with the postponement of the company’s annual shareholder meeting from July 3 to “around the end of July 2008,” has nothing to do with the battle over Microsoft’s (MSFT) takeover bid and the proxy war with Icahn. Kozel, it seems, just wants to–you guessed it–“spend more time with family.”

While touring Japan this week, company Chairman Bill Gates told a news conference that Microsoft (MSFT) isn’t likely to pursue other deals following its withdrawal of its ill-starred takeover bid for Yahoo (YHOO). Said Gates, “Now at this point Microsoft is focused on its independent strategy.”

Windows Live General Manager Brian Hall echoed that sentiment at an analyst meeting yesterday: “We’ve withdrawn the offer and moved on, and now are focused on how we grow as fast as possible organically.”

Seems this whole Yahoo debacle has put Microsoft off acquisitions entirely. Or has it? As first reported by BoomTown’s Kara Swisher, Microsoft recently contacted Facebook to gauge the Internet company’s willingness to sell it the 98.4% of the company that it doesn’t yet own. No word on what Facebook’s reply was, although CEO Mark Zuckerberg has long said he’s not interested in selling the company. And even if he were, Facebook doesn’t exactly solve the problems that Yahoo would have. It’s hardly a viable source of online advertising …

There’s a reason why we’re the only Fortune 500 company with an exclamation point at the end of our name, and now is the time to demonstrate what that exclamation point stands for.”

–Yahoo CEO Jerry Yang

The market is finally having its say about the collapse of the Microsoft-Yahoo deal and its words are far from kind. Shares of Yahoo (YHOO) plunged some 21% in premarket trading this morning after Microsoft (MSFT) abandoned its takeover bid, wiping out about $8.7 billion of the company’s market value. Yahoo’s current premarket price is about 30% below Microsoft’s final offer of $33 a share, which the company deemed inadequate.

Meanwhile, investors are eyeing the market’s opening with a dark, albeit bemused, cynicism–as well as a little wish-it-were-so fancy. From the YHOO message boards this morning …

Fed Opens Yahoo Lending Facility

In response to recent events [the] Federal Reserve Board voted unanimously to authorize the Federal Reserve Bank of New York to create a Yahoo Lending Facility (YLF) to avoid significant stock market disruption and to support Yahoo Inc. shares. Yahoo Inc. and its authorized agents will be able to borrow from the facility to support stock price.

This facility will be available for business on Monday, May 5. It will be in place for at least six months and may be extended as conditions warrant. The interest rate charged on the credit will be the same as the primary credit rate, or discount rate, at the Federal Reserve Bank of New York.

In addition, Yahoo Inc. shareholders who are unable to sell their shares at or above Friday, May 2 closing price, will be able to swap Yahoo shares for the U.S. Treasuries at the set price of $29.70 per share.”

UPDATE:

A few moments after market open, Yahoo is down 17.2% to $23.79. Microsoft is up a little over 2% to $29.83.

“We know what Yahoo’s worth,” Microsoft CEO Steve Ballmer said last week. “$44 billion is a lot of money.”

But it’s not as much as $46 billion, which may be what Microsoft (MSFT) feels Yahoo (YHOO) is worth today. “People familiar with the matter,” who are no doubt collecting a Microsoft paycheck, tell The Wall Street Journal that Microsoft’s board of directors is meeting today to plot the company’s next move in its ridiculously prolonged acquisition standoff with Yahoo. Among the options the board is considering: sweetening Microsoft’s bid to as much as $32 or $33 a share. Which is $2 or $3 less than the figure Yahoo’s major shareholders are said to be seeking.

Which isn’t surprising at all, really. Together, Yahoo (YHOO) and Google (GOOG) control more than 80% of the U.S. search market. And as Microsoft (MSFT) general counsel Brad Smith will happily tell you, that’s anti-competitive. And he’d know, right?