Yahoo bested Wall Street expectations today, announcing stronger net income for its third quarter, despite an also expected decline in revenue.

In addition, Yahoo’s expectations for the fourth quarter are more positive than expected by investors.

But, there were some issues to worry about: Search advertising revenue was off 19 percent and display was off eight percent at “Owned and Operated” sites on Yahoo.

So, while investors can finally relax, how Yahoo can grow going forward is sure to be their next focus.

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The board of iLike planned a meeting earlier tonight to go over a buyout offer by MySpace, several sources close to the situation said. But it was suddenly canceled because of some thorny tax implications related to the talent-retention part of the deal to purchase the social music start-up.

This does not mean the pending acquisition is in jeopardy, sources said, and it could be on track to be signed as early as today, barring any more complications.

What’s also been unclear is the actual price the social networking giant is paying for iLike, which has been reported as about $20 million. In fact, only $13.5 million will be paid in cash, with $6 million slated for forward payments to retain key talent.

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It’s certainly acquisition fever in Silicon Valley today. After it was announced that Facebook had bought FriendFeed, now comes the news that VMware has purchased SpringSource, a privately held enterprise and Web application development and management cloud computing start-up.

The price? That would be $420 million in cash and stock.

With the purchase of Spring Source, Palo Alto-based VMware–which is a top player in the virtualization space–is adding to its cloud-computing application-management strength and also its ties to the open-source community.

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Facebook said today it is acquiring FriendFeed, the online content sharing site.

It is a logical fit for the social networking site, which has lagged behind microblogging kingpin, Twitter, in the real-time search and status game of perception in Silicon Valley. FriendFeed has also trailed well behind Twitter.

Terms were not disclosed, but it is likely be well under the $500 million Facebook once offered Twitter. In fact, sources estimate to me that the price was about $50 million in cash and stock.

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Yahoo reported so-so second-quarter earnings results today, with a decline in revenue, but with a slightly stronger-than-expected improvement in net income.

For the three months ended June 30, the Internet giant said it had revenue of $1.14 billion, excluding traffic-acquisition costs, down from $1.35 billion in the same period a year ago.

Profit was up eight percent, due to cost-cutting. Yahoo said it earned $141.4 million, or 10 cents a share, in the quarter, compared to $131.2 million, or nine cents.

But that’s not really saying much since Wall Street analysts had such low expectations, estimating Yahoo would earn eight cents. But, with a weak advertising market, it is also not that bad.

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Well, despite the news being as bad at Microsoft as it was at Yahoo earlier this week, the conference call after the software giant released its third-quarter earnings was 100 percent less naughty and 200 percent more glum.

In other words, while there were no F-bombs dropped, there were lots of E-bombs–as in econalypse.

Here’s BoomTown’s liveblogging of the call–featuring the software giant’s semi-apocalyptic CFO, Chris Liddell.

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About 10 days ago, BoomTown posted a piece titled, “With a King’s Ransom in Cash, Why Is There Still No Buying Spree in the Tech Space Yet?”

Noting the big cash hordes being held by a plethora of giant tech and Internet companies and their strong cash flows too, even in the midst of the economic meltdown–I wondered when the mergers and acquisitions would ever begin.

With no hooking up as yet–which feels about as annoying as the persistently unconsummated flirtation of Chuck and Blair on “Gossip Girl”–that just won’t do!

So, here are a few suggestions to get this party started.

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Even in the midst of the economic meltdown as prices for acquisition goodies decline, tech companies are keeping their mega-billion-dollar cash hordes warm and dry.

When will they open the purse strings? Or will Oracle’s Larry Ellison be the only hey-big-spender out there in the months ahead?

And when do you think tech companies should commence to gobbling?

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BoomTown was a squeaky enough wheel to get Yahoo CEO Jerry Yang to grant a long interview by phone yesterday–just a day after he had announced weak third-quarter earnings results for the Internet giant, caught as others are in the econalypse, as well as layoffs of at least 10 percent of its global workforce.

But instead of being glum, as you might expect, especially after a year of corporate turmoil that would have finally gotten to even Job, Yang sounded surprisingly confident that Yahoo would emerge a winner after all the wrenching change is wrought at the company he co-founded.

Here is the second of two parts.

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So why hasn’t Microsoft raised the $31-a-share price of the bid it has made for Yahoo yet?

I have been pondering this question recently, as the Yahoo-Microsoft deal sits in limbo, awaiting the results of Yahoo’s earnings next week and the progress of “authorized” talks between the pair.

One might call it a moment of calm before what could be a very nasty storm, if the situation moves onto a proxy fight.

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