Candidates for the job who currently work at Microsoft include SVP Yusuf Mehdi, once Microsoft's online chief; Brian McAndrews, the former CEO of Microsoft-acquired aQuantive; SVP Satya Nadella, who runs search engineering, among other responsibilities; and Bill Gates's replacement as chief software architect, Ray Ozzie.

"Yusuf is not an operator and Satya is a possibility but would be a stretch," a source tell us. "I would bet on Brian McAndrews. But McAndrews might not want it as he made serious bank with the sale of aQuantive and may not want to do more than he has to finish his earn out. I mean, what’s the marginal upside for him?"

As for Ozzie, Kara Swisher quotes all kinds of Microsoft developers who hope he'd take the job,but another source tells us: "I think he's got the gig he wants: basically, being a visionary. And he's great at it."

One problem with Ozzie, says our source: "Only thing I've heard so far is [the candidates are] not internal." So scratch Ozzie and the rest off the list!

"My guess is they'd want to poach from Google, for appearance's sake," says our source. He suggested we take a look at ex-Microsoft employee, Mark Lucovsky — head of Google's search APIs. The problem with Lucovsky is that Microsoft CEO Steve Ballmer might not want to take him back — he reportedly threw a chair when he heard Lucovsky was leaving Microsoft for Google in 2005.

Swisher's Microsoft sources also nominated former Yahoo COO Dan Rosensweig for the job, but a source says: "Dan would never do it given loyalty to Yahoo."

So who's it going to be? The people we talked to gave us the usual boring non-answers — "I imagine Microsoft might take a little time to really look around. There is no massive rush." So we'll suggest another scenario: Why doesn't Microsoft pull a Sandberg?

Sheryl Sandberg was a relatively obscure VP at Google, but she had an important job — overseeing the automated systems that pulled in Google's billions of dollars in advertising revenues.

Our guess: Someone from AOL, possibly Lynda Clarizio, boss of AOL's Platform-A advertising division. Microsoft seems eager to buy AOL —AOL dealmakers met with Microsoft in Seattle last week, and yesterday, AOL started cutting costs in an effort to pretty itself up for a sale — and Clarizio would probably be the top executive to come over in the deal.

AOL CEO Randy Falco wants to get a Hollywood job at Time Warner after putting in his time at AOL. His henchman, Ron Grant, has lost favor of late. Is Clarizio too salesy for the top online job at Microsoft? Probably, but then, there is evidence Microsoft CEO Steve Ballmer might not mind.

(Photo by adpowers)

Why would respectable Web industry executives like former Yahoo COO Dan Rosensweig, former Fox Interactive boss Ross Levinsohn, or Levinsohn's partner at Velocity Interactive, ex-AOL CEO Jon Miller — the kind of names shareholders would trust — sign up with Icahn just in time to get replaced by Microsoft's Kevin Johnson? And why would they jinx their chances at a getting named to the plum job by Yang itself — a far more comfortable coronation? That's why those names never showed up in an Icahn press release. It's also why Icahn's board slate is filled by a bunch of no-names and Mark Cuban, whose feud with Yahoo is now nearing a decade in age.

So, what did Carl Icahn really do wrong? Buy his first share of Yahoo.

(Photoillustration by Jackson West; photo of Icahn by AP/Mark Lennihan)

The likeliest CEOs are nostalgia plays: Former COOs Jeff Mallett and Dan Rosensweig. Mallett, though wealthy from his stint at Yahoo, is underemployed, having seen his last venture, music startup Snocap, sold off for a relative pittance. Rosensweig is working in the world of private equity, a well-paid holding pen for CEOs-in-waiting. Either might do it for love, not money. But why would they feel love for a company whose management ushered them out before they had a shot at the top job?

Yahoo could hire a mercenary. But there's little upside in fixing Yahoo; at best, a turnaround expert might manage to get the company prettied up for a sale. That's not the kind of big score rock-star Silicon Valley CEOs look for, with venture capitalists promising them "ten-baggers" — Valleyspeak for companies whose value goes up tenfold.

The board could turn to internal candidates, of which Yahoo has exactly none. Yahoo's board has figured out, too late, that Sue Decker was at best qualified to be Yahoo's CFO; promoted beyond her abilities, twice in quick succession, she is not the answer to their prayers. She lacks basic people- and product-management skills that a person in her position should have. If anything, the board should be planning for her exit, not her ascension.

That leaves Yahoo with Jerry Yang, whose skill set and ambitions seems limited to bleeding purple. The lack of viable candidates is the only explanation why the founder is still in place.

• AT&T or Comcast buy Yahoo instead AT&T just signed a display-advertising deal with Yahoo. Last year, Yahoo inked a similar one with Comcast that Mark Cuban hailed as the "Deal of the Year." But neither one has the cash for a bidding war with Microsoft. AT&T executives have already said they encouraged Microsoft to make the bid.

• Yahoo sells the Yahoo Media Group to NBC Universal Sources tell us Yahoo is considering selling its media group — news, finance, sports, entertainment, and so on — to NBC Universal. A sale would let Yahoo double down on search and display advertising, essentially "throwing the kitchen sink" into beating Google. Won't happen. Shareholders lack the patience to let Yahoo carry out such a slow-moving recovery strategy. And the media operation gets most of its audience from Yahoo's big portals, like search, mail, and My Yahoo.

• Yahoo sells the Yahoo Media Group to NBC Universal and advertising businesses to FacebookThis is the most ludicrously elaborate scenario. TechCrunch reports former Yahoo COO Dan Rosensweig — yes, the guy Decker forced out — now of private equity firm Quadrangle Group, is working on a deal. His goal is to sell the Yahoo Media Group to NBC and combine the remaining search and advertising business with Facebook. In other news, Rosensweig thinks the New England Patriots should have traded for David Tyree during halftime last night.

• Apple to buy Yahoo One time, Apple CEO Steve Jobs spoke at a Yahoo event. Another time, Yahoo CEO Jerry Yang expressed admiration for Jobs. According to reports, these facts provide conclusive evidence that Apple is considering buying Yahoo. Right. This is as likely as a purple iPod.

• Rupert Murdoch is Jerry Yang's white knight Last summer, rumors circulated that News Corp. wanted to swap MySpace for a piece of Yahoo. This does not mean News Corp. will join in the bidding for Yahoo now. The company already told the New York Times it would not submit a bid. One reason why? With a $60 billion market cap and far less cash than Microsoft, it wouldn't be able to match Microsoft's half-stock, half-cash offer anyway.

That early IPO — a preemptive strike against long-forgotten competitors — was a blessing and a curse. It was great PR, but it also meant that Yahoo had to please shareholders from an early age.

In the '90s, it did so with aplomb. No one personified Yahoo's cockiness more than its president, Jeff Mallett. A former soccer player, Mallett was more often the public face of the company than its reticent CEO, Tim Koogle. He often was quoted when Yahoo struck a large advertising deal; he was an expert at squeezing cash and stock from startups desperate to get traffic from Yahoo. Mallett had his share of mistakes, like the $6 billion purchase of Broadcast.com from Mark Cuban in 1999. But he was, at the least, bold and decisive.

Terry Semel became CEO in 2001, pushing Mallett aside. A new management team came in, full of ad-sales specialists. From 2001 through 2005, Yahoo patiently courted Madison Avenue, building a formidable banner-ad business with blue-chip clients.

Semel also got Yahoo into the search business, buying Inktomi and Overture. But he failed to capitalize on their promise. Many insiders blame Sue Decker, then Yahoo's CFO, now its president, for milking those businesses for cash while Google was investing millions in its algorithms. Semel's other big acquisition push into user-generated content brought it properties like Flickr and Del.icio.us. But it stalled when prices started to rise in 2006. Semel balked at paying big prices for YouTube and Facebook, and they slipped from his grasp.

The rise of Sue Decker roughly parallels the decline of Yahoo. Decker is — no, was — an expert at catering to Wall Street, and a killer at board-room politics. Insiders believe she edged out Dan Rosensweig in a 2006 reorganization. She then, they say, lobbied the board to oust Semel as CEO, using Rosensweig's departure as part of the rationale. Cheeky, but clever.

Both moves backfired on Decker. She'd hoped to put Rosensweig in a lesser role, but he balked and left the company without anyone running its content businesses. Semel left, but Decker did not get the CEO job she'd hoped for. Instead, the company was left looking rudderless, with founder Jerry Yang stepping in as CEO.

Another Decker mistake: Her disgraceful treatment of Wenda Harris Millard, the company's beloved U.S. sales chief. When Millard told Decker she was leaving for Martha Stewart, Decker reacted furiously, locking Millard out of her office and issuing a press release that suggested Millard was out of touch and had been fired. Unsurprisingly, Yahoo's banner-ad sales have suffered since Millard's departures.

Which brings us, more or less, to the present. It's not surprising that Microsoft seized this moment to issue its $44.6 billion offer. Yahoo's poor earnings and gloomy forecast provided one opening; management's incompetent dithering over layoffs provided another.

It's possible that Yahoo might somehow escape Microsoft's grasp. But whatever course Yahoo takes from here, it's clear that it will be even further diminished. Yahoo will be best remembered in business schools, where it's taught as a case study: How quickly tech empires can fall.

• Dan Rosensweig, soon-to-be-ex-exec at Yahoo (he's leaving in March because of the recent re-org) is going to be joining Bono's The ONE organization as its board co-chair. [AP via The Merc]

  

• This genius new site is protean at best, but oh, the potential. If it hasn't topped 100 reviews by nightfall, my pain will be complete. [RateAVC.com]
• Social network Friendster rolls out revamped profile pages, including the ability to display one's last name. Will the innovation ever cease? [Friendster]
• Liberal bloglike-entity The Huffington Post poaches a certain James Smith from Advertising.com to "be in charge of all revenue streams." We wish him well with the job, especially this sure-to-be-fun part: "Smith's duties will also include overseeing the Huffington Post's relationship with IAC Advertising Solutions." [MediaPost]
• Sequoia's blogger in the trenches, Jason Calacanis, says business social network LinkedIn is at a tipping point of actual usefulness. Jesus. Guess I shouldn't have deleted those 600 LinkedIn friend invites over the past few years. [Jason Calacanis]

I worked for Weiner for two years at Yahoo!. You're dead on about him being the winner. Ted Meisel (founder of Overture) is out and Jeff now runs that entire division. I wouldn't be surprised to see him take over media from Braun. Hell, he's been battling with [COO Dan] Rosensweig for a long time and will probably be COO before long. Such is the career path of somebody who "gets it" in a company surrounded by self-promoting idiots.

Incidentally, just as a rush of Yahoo tips comes in, so does a rush of @yahoo-inc addresses asking for comment privileges. Careful out there, folks. It's all fun and games until someone loses a job.