Instead, several sources with knowledge of the situation think Icahn is more likely to choose Edward Meyer and Frank Biondi (pictured here, left to right), both of whom were on the alternative board slate when the activist investor was waging his now-defunct proxy fight against Yahoo (YHOO).

Another possibility is someone BoomTown had previously picked–former Nextel exec John Chapple (pictured here)–as a personal favorite, noting in late July:

Thus, overall, from good-fit perspective, I like another former exec, John Chapple of Nextel best of all because mobile will be increasingly important to Yahoo in Web 3.0 (frankly, it better be, as Web 2.0 has not been too kind to Yahoo).

Via Sprint (S), Chapple knows from big mergers and he knows how to makes deals. He has been the operator of a digital company, unlike many of the others. And he is also an entrepreneur, which is a plus.

Longtime media exec Frank Biondi is a longtime Icahn crony, and Meyer definitely has the advertising chops Yahoo needs, as former Grey Global Group head.

Icahn has already been seated as a board member of Yahoo.

Presumably, Icahn will now begin to try to figure out ways to goose Yahoo’s lackluster stock from the inside, in order to recover the hundreds of millions of dollars in paper losses he has endured since he started his still fruitless quest to change Yahoo’s management and/or get it to sell to Microsoft (MSFT).

One possible scheme was to eventually install Miller as Yahoo CEO.

In any case, both Icahn and Yahoo CEO Jerry Yang strongly supported Miller for the board.

But Miller was unexpectedly nixed because of a noncompete agreement still in place that he had signed with Time Warner after he was tossed from AOL in late 2006.

After tacitly agreeing to waive the noncompete, Time Warner’s CEO Jeff Bewkes told Miller he could not be considered for the slot.

Thus, Yahoo is limited to the list of possible members of Icahn’s director slate.

The reason is a noncompete Miller (pictured here) signed, part of a severance agreement he reached with the media giant after it unceremoniously tossed him out in late 2006.

A Time Warner spokesman said Miller was barred from working “for a variety of competitors, including Yahoo, until March of 2009.”

Like it matters.

According to sources at Time Warner (TWX), the decision came from on high at corporate and not from the AOL unit. And it is not due to jealousy over attention Miller has received of late–Microsoft was also interested in hiring him to take over for departing exec Kevin Johnson.

Miller, sources said, was called by Time Warner CEO Jeff Bewkes (pictured here) last night and told by him, “We’ve changed our mind.”

Why?

Well, to be sure, Miller is no Time Warner favorite, even after being gone for almost two years.

But Miller, whom Time Warner and AOL execs never miss an opportunity to bash, off the record, is also no threat to AOL, which he actually helped revive from the ruins of the disastrous AOL-Time Warner merger.

While working on my second book about AOL in 2002, I will always remember visiting Miller at AOL HQ in Dulles, Va.–where he took up residence in former AOL exec Bob Pittman’s office–and finding him unusually calm after he got the thankless job of following Pittman and AOL icon Steve Case.

Time Warner forces, in the form of new CEO Dick Parsons, had finally managed to take back control of the company and–in a fit of misguided pique–brought holy hell down on the AOL unit.

It was a profoundly emotional reaction, which cost Time Warner precious years and much, much money, as the Internet business revived itself and AOL largely sat on the sidelines.

Miller was in the unenviable position of cleaning up the mess, while also having to listen to endless griping from his bosses.

And, despite the line being put out by Time Warner, he did a pretty good job.

While he might have dumped the dial-up business sooner and been more of an organized manager (the two big complaints about him), Miller did strike AOL’s lucrative Google search ad deal and also bought Advertising.com. (He also tried to buy YouTube, to no avail.)

That purchase should be reason enough for Time Warner to erect a small altar to him, given that it is one of AOL’s only truly valuable assets and the reason Microsoft (MSFT) and Yahoo (YHOO) have been interested in possibly buying the unit.

But no.

Instead, there is the usual he-said-she-said wrangling about whether Miller got approval for being let out of the noncompete clause.

Time Warner apparently claims Miller never got an official waiver, and Miller forces say Bewkes okayed the issue weeks ago, when it was first announced that Miller was one of the board picks being put forth by activist investor Carl Icahn.

It defies belief to go with Time Warner version, given everyone and their mother’s mother knew Miller was the likely pick of both Icahn and, especially, Yahoo CEO Jerry Yang.

More interesting is why Time Warner would choose to speak now, especially on the day of Yahoo’s board meeting.

At the meeting, the Yahoo board approved expanding its number of directors from 9 to 11 and formally voted to let Icahn take over the seat being vacated by Robert Kotick.

Miller was the shoo-in, with other likely choices. including former Nextel (S) exec John Chapple, media exec Frank Biondi and former Grey Global Advertising head Edward Meyer.

Perhaps Bewkes imagines somehow that Miller will be a leverage point in talks Time Warner has been having with Yahoo to be acquired. But the smooth exec is an expert negotiator and that seems unlikely.

More likely is that those talks, like AOL’s talks with Microsoft, have gone a little cold of late as everyone shuts up and stops making ill-conceived moves, to show Wall Street that they have their forward-leaning Internet strategies figured out.

No one does. Not Yahoo. Not Microsoft. And, most definitely, not Time Warner’s AOL.

That’s why Bewkes should stop the saber-rattling and free Miller to serve on the Yahoo board.

Yahoo could benefit and, as it stands now, Time Warner just looks silly–it does not want Miller, but it doesn’t want anyone else to have him.

My three-year-old knows how to share better than that.

And, as BoomTown wrote yesterday, so the war of attrition for Yahoo begins.

Not with a bang, but a whimper. And so much whine, I am considering serving up a nice plate of cheese to all players.

But while the first moves by Microsoft (MSFT), which is seeking to take over Yahoo (YHOO), seem a bit weak, it is likely the more significant bombs will start flying next week.

But not quite yet.

First, came a not-so-subtle insinuation from Microsoft Steve Ballmer that he could take his marbles and go home any time.

He noted yesterday in a speech in Milan (Milan? OK, we’ll go with it) that the software giant is “prepared to move forward alone without Yahoo.”

A show of hands of who actually believes this claim, please, a classic go-fish negotiating ploy? No one? We thought so.

Then, comes the artfully worded Wall Street Journal story today, in which it is revealed that some at Microsoft are skeptical of the deal.

Apparently, Microsofties are worried that the job of merging Yahoo into Microsoft will take precious attention away from, well, them!

Well, that’s been the biggest open secret at Microsoft. Almost anyone you talk to notes that the Yahoo deal is risky, but it would be done no matter what due to Ballmer’s determination to use Yahoo to better hammer at rival Google (GOOG).

“This is Ballmer’s war,” said one Microsoft employee to me recently, who also noted that it is still a good move for Microsoft, despite the slowness of the attack. “I doubt he will surrender.”

Well, BoomTown suggested Microsoft do so back in mid-February in a post, noting that Ballmer might do better to use the $41 billion to buy up every hot start-up in Silicon Valley–Digg, Meebo, Slide and even the hopelessly high-valued Facebook–and still have money left over to buy everyone a tank of gas.

The Journal story also listed previously reported names of possible directors for a proxy slate Microsoft must nominate to replace Yahoo’s current board.

They include, noted the story, “former Nextel Partners Inc. CEO John Chapple, former Grey Global Group Inc. CEO Edward Meyer, Jaynie Studenmund, the former chief operating officer of Overture Services Inc., which was later acquired by Yahoo, and former Adelphia Communications Corp. Chief Financial Officer Vanessa Wittman, according to people familiar with the matter.”

Not to be whiny about it or anything, but with no truly prominent Internet executive or figure among these director possibilities so far, BoomTown would have to say we are profoundly underwhelmed by the list.

Thus, we await more powerful forces.

And that might be sooner than later. Microsoft will announce its earnings this afternoon, which–if they are strong and lift the price of Microsoft stock and, therefore, the Yahoo offer–could be the first big gun to fire in the proxy fight.