One of those is Cal Henderson, Flickr's longtime director of engineering (left). AllThingsD's Kara Swisher reports that he's left Flickr and is working on a startup with Flickr cofounder Stewart Butterfield, who quit Yahoo with a bizarre resignation letter last year.

That's not all he's up to: We hear he spoke at some length with a Google recruiter at a party Saturday night. In an IM conversation, Henderson admitted he went to a party "with some folks from Six Apart [the blog-software company] and Flickr," but denied he'd spoken to anyone from Google.

Google's interest in Flickr's people is of long standing. Before Yahoo bought Flickr in 2005, Butterfield and his cofounder, then-wife Caterina Fake, flirted seriously with selling to Google. (In the small-world department: Megan Smith, the Google executive who championed a purchase of Flickr, is married to Swisher, the blogger who broke the news of Henderson and Butterfield's new startup.)

So if Google can't have Flickr, why not have its best people? No surprise that they're talking — and no surprise that Henderson's playing hard to get.

Smith is replacing Google.org's current chief, Larry Brilliant, who's getting put out to pasture with some vague job involving "philanthropy evangelism." (In Hollywood, they give retiring executives producer deals; in Silicon Valley, they make you an "evangelist," a flowery marketing title which really means you get paid to give speeches at conferences and have lunch with people who also don't matter.) She'll now oversee do-gooding investments, like Google's push into renewable energy and disease tracking. That's on top of her day job wrangling deals with Google partners like MySpace (a relative success) and Facebook (an abject failure). She's close to founder Sergey Brin, a source of considerable soft power in the supposedly unhierarchical company.

Meanwhile, her spouse, Swisher, a former Wall Street Journal reporter, gets most of her power in the industry from running D, an annual tech-CEO conference she organizes with Walt Mossberg, the paper's powerful gadget reviewer. Mossberg gave Swisher away at the couple's first, unofficial wedding; the couple later got officially married before the passage of Proposition 8, California's gay-marriage ban.

Swisher has a lengthy disclaimer about the relationship on her AllThingsD tech blog, and the couple have wrapped up Smith's Google holdings in trusts so Swisher can reasonably claim she doesn't control them. People in the industry still look askance at the relationship, questioning how Swisher might have an ulterior motive when she's tough on Google competitors like Yahoo and Microsoft. As Smith's ambit grows, those questions will rise in volume.

But Swisher causes as much trouble at work for Smith as Smith causes for Swisher. The latter's savage reporting on the antitrust implications of Google selling ads on Yahoo helped derail an agreement between the companies, and almost got Google sued by the government. Smith's job makes things difficult for Swisher as a reporter; Swisher's reporting gets Smith's bosses in hot water with the feds. If these two are still together, it must be love.

(Photo by Lane Hartwell)

Despite the marriage, Swisher's disclosure statement still claims that Smith's wealth in Google shares is not Swishers' as well:

A substantial amount of her income from Google is in shares and options, some of which she has sold and some of which she still holds. Megan makes all her own decisions related to these shares and options, and I do not own or control any of them.

Swisher explains to me that Smith's Google shares are going solely to their kids through living trusts, an arrangement which predates their marriage.

But really, does it matter? I've always felt that Swisher's claim that she doesn't own or control Megan's shares was a bit of a fudge on the real situation; Swisher and Smith share a house and raise children together, and their lives and fortunes are thereby entwined. And their relationship, whatever its legal status, will continue to raise eyebrows as long as Swisher covers the industry. Marriage won't change that. Nor, as much as Google executives, Smith included, might wish otherwise, will it soften Swisher's savage coverage of the company.

(Photo by Lane Hartwell)

Google's mistake: Creating a PowerPoint presentation and posting it to a site with the search-engine-optimized name "Facts about the Yahoo-Google advertising agreement." In the presentation, which we've embedded below, Google explained that the deal is not a merger and that Ford uses Toyota engines in some of its cars. It also misquoted Swisher, making her really mad.

The presentation cites Swisher as saying:

There’s not a whole lot for the Justice Department to hang a case on, in contrast to its case against Microsoft, which landed in court because of bullying behavior that actually took place before the case was waged.

What Google's presentation doesn't say is how Swisher prefaced the post from which that quote was taken:

I and many others–advertisers, publishers and state and federal regulators–are a bit nervous about further concentration of market power in one set of hands, even if they are such Googley hands. But in the interest of fairness and because I like to argue with myself here is a counterpoint with three key reasons why Google and Yahoo might hold firm in launching the partnership.

"I feel like one of those misquoted movie critics in newspaper ads!" Swisher writes in a post today:

("Go…see…it…quick!!!," when the entire quote was "Go home before you see even a second of it or you will be sick quick!!!”)

(Photo by Joi)

AllThingsD's Kara Swisher also showed up with her Googler spouse, Megan Smith. "We're dressed as lesbians," said Swisher. (How was one supposed to tell the difference? Oh, right — usually Swisher's dressed like a soccer mom.)

Somewhere in the confusion, the event's producer thrust a ticket in my hand, and I walked into the screening. No sign of Marissa, though, who I'd heard was wearing a Pucci dress. Before I could spot her, the producer walked up the aisle to my seat. "Owen?" he asked? Yep, that's right — eighty-sixed again. I spotted Orkut Buyukkokten, Marissa's best gay friend, on my way out. Not that I minded getting booted, really — I hear the movie's not all that great. I was more interested in the trailer I saw for Mamma Mia — hey, Marissa, can you throw a screening for that, and invite me?

I'll leave you with one last pic of the moviegoers:

• Alan Levy (BlogTalkRadio)
• Alec Oxenford (OLX, DineroMail)
• Alejandro Estrada (DineroMail)
• Alexis Bonte (Erepublik.com)
• Andrew McLaughlin (Google)
• Anil de Mello (Mobuzz)
• Arturo J. Paniagua (Hipertextual)
• Auren Hoffman (Rapleaf)
• Axel Schmiegelow (Sevenload, Denkwerk Group)
• Benjamí Villoslada (Menèame)
• Brent Hoberman (Mydeco)
• Carlos Martìn (IG Expansiòn)
• Cedric Maloux
• Christophe F. Maire (Nokia gate5, investor)
• Claudia Gisiger-Gonzalez (UNHCR)
• Dan Dubno (Blowing Things Up)
• David Sifry (Technorati)
• Demian M. Bellumio (Cyloop)
• Eduardo Arcos (Hipertextual)
• Efe Cakarel (The Auteurs)
• Ehssan Dariani (studiVZ)
• Esteban Sosnik
• Esther Dyson (EDventure)
• Felix Petersen (Plazes)
• Hans Peter Brøndmo (Plum)
• Ibrahim Evsan (Sevenload)
• Ivan Communod (Vpod.tv)
• Jacob Hsu (Symbio)
• James Gutierrez (Progress Financial)
• Jennifer L. Schenker (BusinessWeek)
• John Markoff (The New York Times)
• Joichi Ito (Creative Commons, Six Apart Japan, investor)
• Jon Berrojalbiz (Trading Motion)
• Jonas Birgersson (Labs2)
• Jörg Rohleder (Vanity Fair)
• José María Figueres (Grupo Felipe IV)
• Jose Marin (IG Expansion)
• Julio Alonso (Weblogs SL)
• Lars Hinrichs (XING)
• Loïc Le Meur (Seesmic)
• Louise T Blouin MacBain (Louise Blouin Media)
• Lukasz Gadowski (Spreadshirt.com, investor)
• Lukasz Wejchert (Onet.pl)
• Marc Samwer (European Founders Fund)
• Marcelo Claure (Brightstar Corp.)
• Marko Ahtisaari (Blyk, Dopplr, FON)
• Mathias Entenmann (Betfair)
• Matt Biddulph (Dopplr)
• Megan Smith (Google)
• Michael Arrington (Techcrunch)
• Michael Jackson (Mangrove Capital Partners)
• Michael Wolf (Farallon Point)
• Nikesh Arora (Google)
• Ola Ahlvarsson (Result, FON)
• Om Malik (Giga Omni Media)
• R.J. Friedlander (Grupo Planeta)
• Ricardo Galli (Menéame)
• Rodrigo Sepúlveda Schulz (Vpod.tv)
• Rupert Schäfer (DLD, Hubert Burda Media)
• Scott Rafer (Lookery, Mashery, Winksite)
• Tariq Krim (Netvibes)
• Thomas Crampton (Next Media)

The strenuous denials only made me more curious, so I got the whole story on Brin's evening. Brin, already in San Francisco with his wife, 23andMe's Anne Wojcicki, spontaneously decided to drop by the Sheraton Palace. His unplanned arrival surprised PR rep Courtney Hohne, there to squire Google executive Jeff Huber, as well as colleague Megan Smith, one of Google's top Facebook dealmakers. After dinner, he attended a trivia contest at Web 2.0 Summit. In other words, he took the night off — or so his associates claim.

What's the logical conclusion one can draw? Either the hardworking Brin, a champion within Google of doing a deal with Facebook, has given up on making it happen — or he thinks it's already a lock. Either way, I'm glad Brin got to relax — because his little drop-in had this gossip blog working all night.

The obvious conclusion: Brin is reaching out to Greylock to clinch the deal. Facebook's investors have a strong say in the matter. A deal that values Facebook at $15 billion would give Greylock a nearly 30-fold return on its $25 million investment.

Greylock partner David Sze, a board observer at Facebook, encountered Brin and Smith in the hotel's hallway. While he didn't join them for dinner, he sent Eve Phillips, a Greylock associate who's leaving the firm to go startup. Also in the party: Topix CEO Chris Tolles.

It seems strange that the two would attend a dinner with such sensitive dealings in play. Unless you know that Phillips is deeply plugged into the Facebook-applications world. And Tolles, we hear, was once Smith's roommate. As trusted parties, they might have been called in to offer advice on strategy.

Complicating matters: Google and Facebook are houses divided. Word has it CEO Eric Schmidt is indifferent, if not hostile, to Google reaching a deal with Facebook. His recent comments to the Economist support that. Brin and Smith, however, are active proponents of a deal.

Facebook CEO Mark Zuckerberg's glib quip on Wednesday that the company's financing deal was "almost wrapped up" now appears optimistic, if not premature.

Google, a late entrant in the game, is offering a more complicated deal, we hear: Rather than a straight investment, it's trying to line up private equity from other investors while Google inks an arrangement to provide Facebook with advertising. That complexity may be what's dragging things out longer than Zuckerberg expected.

If this dinner is what it appears to be — a sign of continuing negotiations — then that means the game's still afoot. The Facebook deal is still in play. And Google is going all out to win it.

"I think Silicon Valley is the most exciting place in the world right now," says Murdoch, DeWolfe's boss for another two years.

"Looking back, it looks like you got a pretty good deal," observes Battelle. "What did you see?" he asks Murdoch. "Was it like, 'I hope this one works out,' or did you think you'd be sitting on a red couch at Web 2.0 two years out?"

"We thought there was a real opportunity, and [asked ourselves], 'What do we have to pay to shut the doors?'" replies Murdoch. "We never imagined it would do this well."

Murdoch says that Fox Interactive Media, the unit of which MySpace is the biggest part, could cross $750 to $800 million in revenues next year. And there's a hint, in the back-and-forth, that the rumored earnout provision in DeWolfe and Anderson's contract might be tied to MySpace and the rest of FIM hitting a target of $1 billion in revenues.

DeWolfe and Murdoch make nice-nice comments about Google, which has a $900 million contract to provide search and ads on MySpace. Battelle keeps probing them. It's almost like he wants Murdoch to call Google a "frenemy," but, alas, the wizened, megarich News Corp. mogul settles for "threat and friend." (Google executive Megan Smith, recently locked in negotiations with MySpace rival Facebook, sat next to DeWolfe at the dinner before the interview.)

Confirming Valleywag's scoop that the MySpace platform would not be ready for today, DeWolfe says that the company is, as we reported, compiling a directory of third-party widgets currently used on the site's profiles.

Battelle asks Murdoch, "What do you think of Facebook?" A pause. "I think it's pretty cool," says Murdoch. "It's more of a utility.... In spite of the hype, we seem to be growing faster."

"Is that a reference to the September ComScore numbers?" asks Battelle. (ComScore, controversially, showed a drop in Facebook's traffic last month.) "Yes," says Murdoch. A pause. "I love that Rupert Murdoch is referencing ComScore Internet numbers. I don't know why, but I love it."

Is MySpace a portal? "We're more like a connectivity engine," says DeWolfe. Apparently that's better than being a "utility."

Battelle asks Murdoch about the acquisition of Dow Jones, publisher of the Wall Street Journal. "Well, I haven't paid for it yet," says Murdoch, alluding to the deal's expected closure in December. "Are you going to kill the New York Times?" asks Battelle. "That'd be nice," says Murdoch. Murdoch then says CNBC, rival to News Corp's newly launched Fox Business Network as "half-dead" — and then retracts the observation, noting that CNBC's still making hundreds of millions of dollars. As for FBN's future, "I'll stick with it for at least a few years."

Murdoch talks acquisitions for a bit, grousing that everything's too expensive and he doesn't want to pay 30 times earnings. He sounds like an old man complaining about the menu prices in a restaurant. DeWolfe talks a bit about the acquisition of SDC, an ad-targeting startup, and Photobucket, whose purchase Valleywag reported exclusively.

Intrepid special correspondent Paul Boutin steps up to the microphone and asks Murdoch, "With all the deals you do, how do you know when the price is right?"

"I don't," says Murdoch. "I just hope." More will be said, but for that, Murdoch deserves the last word.

But that was well before talks had started. Smith was likely catching up with Zuckerberg, whom she hadn't talked to since Google and Facebook last held tentative investment discussions more than a year ago. Google higher-ups are, no doubt, kicking themselves that they didn't buy Facebook back then, before its valuation soared into the billions of dollars.

Left out of the loop: Megan Smith's partner, Kara Swisher of AllThingsD, who's been covering the Facebook story and broke the news of Google and Yahoo's interest, but heard of Smith's involvement in the negotiations from someone else, which led to some frosty moments at home. "Megan's the most useless source of all time," Swisher told me.