Our quest was to find out what some savvy Web 2.0 types thought would–or should–happen next in the Microsoft (MSFT)-Yahoo (YHOO) takeover battle, following Yahoo’s earnings report yesterday.

Thus, we made the scene–at widgetmaker RockYou’s “Rockin’ Spring Mixer” at Bong Su and news site Digg’s get-together at Mighty–to get some advice on what’s going to happen next.

Frankly, BoomTown is running low on ideas and we got a good range of predictions to bolster our bare cupboard.

So here’s a good mix of interviews on the topic, with folks such as RockYou CEO Lance Tokuda, Broadband Mechanics’ Marc Canter, Digg Founder Kevin Rose (in the very, very dark and noisy club–sorry!–but you can hear him at least), Digg CEO Jay Adelson and others.

And, at the end of the video, using a dinosaur toy as a metaphor, Louie and Alex Swisher, who pretty much have the situation down cold.

Here’s the video:

I just got through telling someone who asked me that I thought you, Slide founder Max Levchin, was one of the smarter Web 2.0 characters.

Then, of course, you get to be on the cover of Portfolio magazine for its “Brilliant” issue this month. Apparently, Max, you are Silicon Valley’s new “It” Boy.

But for all your apparently massive amount of brain cells, which should be on display at your keynote today at the Web 2.0 Expo in San Francisco, how can you be so dumb as to stumble into that same old rabbit hole as so many other Internet hotshots?

Yes, Max: The goofy photo.

In your case, you look good in the coat-and-tie get-up. But please tell me why, oh, why are you balancing a giant lightbulb on the top of your head, as seen here?

It just ain’t dignified!

(Levchin revealed to me via email last night that he actually balanced the monster bulb on his head–but I remain unimpressed.)

Still, you can be comforted to know, though, that you join a legion of other legendarily goony tech figures in the continued march of egregiously wacky pictures.

Such as:

Microsoft’s Bill Gates and his prom date, a PC:

That lovely couple, Larry Page and Sergey Brin of Google, and those irksome colorful exercise balls (not that there is anything wrong with that):

Digg’s Kevin Rose channels Wayne’s World:

Former Netscaper Marc Andreessen as Le Dauphin of France:

And, my personal choice for goofy-de-tutti-goofball photos–Amazon’s Jeff Bezos with his noggin in a box:

And it is no real secret in Silicon Valley that the pair have been talking on and off for a while now, as Google (GOOG) mulls where to take Google News and Digg ponders how it can grow and improve its reliability by being linked to the largest and most neutral company it can.

But after all the Sturm und Drang around news of a phony bidding war for Digg between Google and Microsoft (MSFT) with prices hovering around $200 million that broke out a month ago (which BoomTown refuted in a post here), I thought it was long about time I chatted with its CEO Jay Adelson, to talk about the future of Digg and also the state of news online.

While photogenic Digg founder Kevin Rose often gets the focus as the geek-in-charge at the company, Adelson has had as much skin in the game and also has a deep tech background at early Internet networking companies like Netcom and also as a founder of Equinix.

Traveling between his home in New York and Digg’s San Francisco HQ, Adelson has been helming the user-generated news-discovery site, as it has grown to its current 27 million unique monthly visitors and 250 million page views. Adelson says Digg is poised to be profitable this year.

And while it is easy to find problems–pointing to aggressive competitors like Mixx and Yahoo’s (YHOO) BuzzTracker and serious and nagging issues around technological glitches (like yesterday, for example)–Digg still remains one of the most interesting and substantial start-ups to emerge from the Web 2.0 landscape.

Adelson talks about all this, with an interesting perspective on the hothouse that is Silicon Valley and also where things are going in the digital sector.

Here’s the video:

Please see this disclosure related to me and Google.

I am at a new conference organized by August Capital’s David Hornik called The Lobby on the Big Island of Hawaii.

It is thick with Web 2.0 players, all here to interact and discuss issues, although without a formal program that is so typical of most Internet conferences.

In other words, the schmoozing in the halls is front and center, an interesting cut-to-the-chase twist from the gadfly VC Hornik.

So what was the talk last night at the opening cocktail party? The Facebook deal, of course, with most people being alternately incredulous, dubious and in awe of the $15 billion valuation that Mark Zuckerberg snagged from Microsoft.

In general, people were worried about the impact on their own companies, most agreeing that it would make the bubble even more bubblicious and that it marked the return of that frothy but queasy feeling of the first Internet bubble when AOL somehow managed to grab Time Warner in a deal that, as it turned out, will now live in infamy.

We’ll see about that, but now it is off to some mysterious group activity all day and, at some point, natch, a beach party.

Or as Elvis sang so movingly: Clambake! Geeks going to a Clambake!

Here’s some video, featuring folks like Kevin Rose and Jay Adelson of Digg:

But it should also have become crystal clear by now that Microsoft–and especially its famously aggressive CEO Steve Ballmer–is going to do anything to change that equation.

Case in point: its recent deal to be the exclusive company for Digg’s display and search advertising.

“This move gives us an advertising partner with a larger organization and a more scalable technology platform to keep pace with Digg’s growth,” Digg founder Kevin Rose wrote yesterday in his blog. “It’s important to say that we’re as focused as ever on a great user experience. So, no dancing-monkey ads, and the design will remain uncluttered.”

No dancing monkeys perhaps, but perhaps a little celebratory jig at the news site for the opportunity to play Google and Microsoft off each other and reap the rewards.

Under the three-year deal, Digg, which claims more than 17 million unique visitors a month, will likely get a big wad of guaranteed cash, much in the same way–though probably a lesser amount–Microsoft handed it over to social-networking site Facebook in the wake of Google’s $900 million deal with MySpace.

The move appears to be a blow to Google, which lost the contextual ad business it had had with Digg, as well as Yahoo, which can’t seem to get some skin in this pricey game.

Nonetheless, as with Facebook, it is not entirely clear exactly how profitable such arrangements are for Microsoft, even if they are a windfall for Web phenoms like Facebook and Digg.

Neither of these sites, for all their popularity, has yet proven itself as being able to deliver effective ad results for marketers.

But Microsoft seems willing to foot the bill for the experimentation, which could turn out to be a little less fun than a barrel of dancing monkeys.

Please see this disclosure related to me and Google.

Valleywag wanted to know what the well-known tech blogger was up to, so we will tell them: an online television interview and analysis show on Revision3 called “The GigaOm Show.”

Along with tech lawyer Joyce Kim (who is also sister-in-law to Jason Calacanis), the weekly show will be 10-minute talks with various tech CEOs and start-up entrepreneurs.

Malik will handle the editorial and Revision3–founded by Digg founders Jay Adelson, Kevin Rose and others–will deal with production, distribution and ad sales.

The show will also appear on Malik’s site. And the first episode will premiere tomorrow night and will either be one of three interviews already in the digital can: RealNetworks’ Rob Glaser; Seagate’s Bill Watkins; or the ubiquitous entrepreneur James Hong. Sorry to miss the festivities, of course, but congrats to Malik.

One also wonders what TechCrunch’s Michael Arrington might announce at his party Friday night at August Capital. Maybe new funding, which is reportedly in place for the tech start-up bulletin board blog.

The always-cordial David Hornik of August extended an invite to that party, but I’ll be visiting Reuters, Yahoo and a spate of other Internet companies in London, you know, doing reporting.

While I hate to miss two good Silicon Valley parties, I will raise a glass to ever-expanding blog empires from some cozy pub.

So yesterday afternoon, I moseyed on over to the San Francisco Design Center’s Concourse to the launch of the Facebook Platform, a new initiative by the No. 2 social-networking company as it seeks to transform its business to a larger stage by partnering with all sorts of third-party developers.

While there, of course, I ran into a panoply of Web 2.0 denizens and got their take on what queries should be put to Gates and Jobs, seen strung together in the video below.

First up (and best question thus far): Digg founder Kevin Rose, who wanted to know what each of them would do if they switched roles.

Then, Plum founder Hans Peter Brondmo wanted to know why the pair was not jumping onto the open Web and also why Microsoft could not churn out operating systems like Apple.

Entrepreneur Julie Hanna Farris was curious about open-source issues, as well as Web-delivered applications.

Accel Partners venture capitalist Jim Breyer, a big Facebook investor, drilled in on Jobs and asked why Apple had stopped embracing start-ups.

And, finally, Facebook COO Owen Van Natta wanted to know when Microsoft and Apple would starting building on, of course, the new Facebook Platform.

When lawyers for Digg advised removing them, execs did, but then reversed themselves after users hijacked the site with masses of stories about the key. Rose promised online and here not to back down anymore to those annoying little things called laws.

But you can see for yourself:

The late-night television host is involved with Demand Media, the user publishing-and-content platform, in its new .tv initiatives, and he talked about the state of the video market with Demand’s CEO Richard Rosenblatt, MP3tunes CEO Michael Robertson, Sling Media head Blake Krikorian and YouTube Co-Founder and CEO Chad Hurley.

Their chat was mostly about the massive impact video is making and will continue to make in the coming year, especially related to giving consumers a lot of leeway and control via tech tools. “You have to give [users] everything they want, anywhere they want,” said Robertson. “… But just because everyone has a Webcam, it does not mean it will result in good content.”

Sling’s Krikorian was more positive. “There will be a democratization of production tools,” he said. “And [traditional media companies] are going to be giving up ground. It’s just a question of seize the opportunity.”

Hurley said YouTube intended to do that in the year ahead in the mobile market especially, given that his less-produced trove of user-generated video “look a lot better on the phone.” He declined to talk specifically about the $1 billion lawsuit that media giant Viacom is waging against YouTube, which was recently purchased by Google for $1.65 billion, even as Robertson prodded him by welcoming Hurley into the “10-digit lawsuit club.” Robertson’s former company, the MP3.com online music service, was the subject of earlier copyright lawsuits.

“We have a bigger vision,” said Hurley. “We have a big opportunity ahead of us to find solutions to monetize video and create a new market.” But he was mum on what those ad solutions will look like. “We’re experimenting,” he said.

Rosenblatt was the most visionary of the lot, though, predicting the rise of a more vertical Web and “microcommunities” that people will join. “People want their own channels,” he said. “I do believe users want more choices.” That means, he added, that the mass-media plays that Hollywood specializes in would be under siege.

But it was Daly who managed to be most pithy about that trend. Speaking for Hollywood, said Daly, “The Internet scares the crap out of us.”

Another surprisingly entertaining speaker was Motorola’s CTO Padmasree Warrior, who was there to talk about the cellphone maker’s aspirations beyond the device. She also stressed “personalcasting,” and noted that “individuals have choices and preferences and the device should know those preferences.” She also said mobility was the biggest trend she saw, using a rapidly blinking dot shown on the screen to represent cellphones bought worldwide (32 every second; that’s 2.7 billion mobile devices, more than three times the number of personal computers). That means, she noted, that companies like Motorola had to cozy up to content folks. “As CTO of Motorola, I never thought I would be in Hollywood,” she said. “I am a geek.” Indeed.

I also moderated an opening panel this morning called “Breaking News and Analysis 2.0″ with Arianna Huffington, co-founder and editor of the political powerhouse site Huffington Post; Alan Citron, general manager of the gossip site TMZ.com; and Kevin Rose, founder of Digg. The conversation, which you can see streamed off the OnHollywood Web site, centered on the mainstream media’s challenges from outfits like those run by the three panelists. Huffington, as usual, was full of quips, especially when talking about the need to stop making the online/offline distinction. She compared it to the false choice between “Gilligan’s Island” hotties MaryAnn and Ginger. “You should have a threesome,” said Huffington.

Rose was probably glad to be in a quieter venue after yesterday’s noisy controversy over the removal of stories from his social news site that contained a secret DVD encryption key. The company’s lawyers advised execs at Digg that it might be illegal to have published them. The purging caused a revolt on the site by its very active, First Amendment-wielding users, who flooded the site with stories about the key. Rose backed down–did he really have a choice?–and in a blog post on Digg wrote, “We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be. If we lose, then what the hell, at least we died trying.”

He reiterated the sentiment at the conference, which garnered applause, even if Digg might actually die trying.

Please see this disclosure related to me and Google (owner of YouTube).