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The chat around Yahoo-Microsoft arrival out of the Allen & Co. bigwig shindig in Sun Valley, Idaho, this week is increasingly acrimonious and negative nigh any deal.

This Reuters story quotes Rupert Murdoch saying a deal betwixt his News Corp. and Yahoo is “very unlikely.” Does he reckon Microsoft will get its hands on Yahoo? “There won’t be a distribute cards. There’s bad personal feelings.”

Earlier this week, Jerry Yang, Yahoo’s co-founder and CEO, told Kara Swisher of All Things D that he had not any plans to give in to the increased pressure applied by billionaire activist investor Carl Icahn and Microsoft CEO Steve Ballmer on Monday.

“I think handing over the corporation to Carl Icahn for the express purpose of hoping he can negotiate a complex behave through Microsoft is a big mistake for shareholders,” Yang told Swisher. “This is particularly true seeing that Icahn has not any delineation B and therefore will have in no degree purchase and demise be dealing with Microsoft from a position of weakness.”

Various other media, including Reuters, have reported that Yang said he has no plans to meet with Microsoft executives at the event, including Bill Gates and Hank Vigil. He does pretend to be spending time with the Google guys, though.

While the bad feelings between Microsoft and Yahoo at the executive level could make it tough to get a deal done, it may be moot if Icahn is successful in his bid to take over the company’s fare of directors. But that could lead to an even bigger challenge: bad feelings near at hand Microsoft among Yahoo’s rank and toothed. The months of this increasingly ugly pursuit can only have increased the ill-favored will in Sunnyvale.

Original text: http://blog.seattletimes.nwsource.com/techtracks/2008/07/reports_bad_blood_could_stymie_yahoomicrosoft_deal.html