“Google is now officially our best friend.”

Oh no.

Instantly, an image popped into my brain– that of the slithery Kaa singing “Trust in Me (The Python Song)” to Mowgli from the Disney classic animated film, “The Jungle Book.”

“Trust in me, just in me
Shut your eyes and trust in me
You can sleep safe and sound
Knowing I am around

Trust in me, just in me
Shut your eyes and trust in me.”

You know what happens next, of course. A big squeeze, but not the good kind.

While Yahoo (YHOO) might not have wanted to be acquired by Microsoft (MSFT), its alternative to goose its revenues by relying on Google (GOOG) in an outsourced online search-ad deal is one it might regret even more if struck.

Why? Aside from the potential antitrust issues, which are distracting at the very least, it fundamentally puts one of Yahoo’s main businesses–search advertising–directly into the hands of the very company that killed off Yahoo’s chances of ever succeeding in the arena in the first place.

By its inability to innovate search–not exactly Google’s strong suit–and also not moving quickly enough after acquiring the once-superior technology from its Overture acquisition, Yahoo had perhaps already nailed itself into its own coffin.

But by now signing an outsourcing deal with Google, it will be saying that it cannot compete at all in the key arena of the Internet going forward.

AOL (TWX) did this kind of deal with Google and saw its search share dwindle, even though it collected Google’s payoffs. Now it is essentially a vassal state of Google, as its display businesses has weakened with the economy and its access business is to be cleaved off.

Speaking of pythons, Infectious Greed blogger Paul Kedrosky compared Yahoo to the crack suicide squad in Monty Python’s hysterical “Life of Brian.”

Still, Yahoo is putting lipstick on the pig.

In a statement today after news of the Microsoft pullout was revealed, Yahoo Chairman Roy Bostock asserted that Yahoo was “steadfast in our belief that Microsoft’s offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view.”

Those supposedly pleased shareholders will be hard to find Monday after the market opens and Yahoo shares hurtle downward.

Whether Yahoo’s management has the talent to pull the stock out of the basement remains to be seen, although Bostock added that Yahoo is “profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market.”

Actually, it is Google that is executing well and that has always been Yahoo’s problem. Now it must apparently turn that disadvantage into a virtue, while it is under enormous scrutiny from everyone and everywhere to perform.

And that kind of pressure could crush just about anything.

For a more amusing take on being squeezed, here’s a video–courtesy of Google’s copyright-infringing YouTube–of Kaa singing to Mowgli (which might soon seem very familiar to Yahoo CEO Jerry Yang):

And here is the video of the crack suicide squad from “Life of Brian”:

Please see this disclosure related to me and Google.

I will be traveling south to Los Angeles Sunday afternoon to do a few days reporting there.

That will include visits to the offices of JibJab, Userplane, Disney’s Internet Group, as well as some catching up with newly minted investor Ross Levinsohn and Joost CEO Mike Volpi.

We’ll be headed that way again a week later to go to Rafat Ali’s “iPhone & Beyond” one-day conference, and to see the new studios of TMZ, the execs at Move.com, Veoh and perhaps visit MySpace, Yahoo in Santa Monica, Helio and also meet the new head of Hulu.

Also on the agenda, DEMOfall and a lunch with blogger Paul Kedrosky in San Diego.

As you can see, a wide range of companies and people, which is why if you’re going to be a tech reporter going forward, you must school yourself quickly on what is happening in the digital arena in Southern California.

I have an even longer list of people and companies I want to meet there, so I expect to get there more often over the next year, rather than just sticking to the 101/280 corridor here in Northern California.

In fact, I have been wading deeply especially into the entertainment industry for a long time now, because the intersection of that industry and tech is one of the more important stories going forward. It’s a canard that Silicon Valley and Hollywood are at odds. While they will be fighting, of course, their fates are now inextricably combined and even aligned.

Case in point: A post I did this past week on the appalling instance of an ingenue singer being “discovered” on YouTube, when it turns out she was being secretly groomed by Hollywood Records to seem like an amateur phenom.

An amazing story, which is all about how marketing, entertainment, content and distribution of information are shifting quickly and with great chaos.

So, I will just say, as Randy Newman sings below (a video someone ripped onto YouTube, of course), I love L.A. Considering the stakes, it would be foolish not to.

If so, watch out for a new conference from blogger Paul Kedrosky (pictured here), planned for next year called Money:Tech.

Set to take place in February in New York (this dead-of-winter-and-thus-grimy-in-Manhattan prospect loses the conference immediate sexy points) and in partnership with longtime conference pro Tim O’Reilly, the event will focus on “near and dear to my heart: the confluence of money and technology (hence the name),” wrote Kedrosky on his also aptly named “Infectious Greed” site.

Also noted Kedrosky ominously:

Hedge funds, unbeknownst to most people, are actually now havens for geeks and software sorts, with all the consequences you might expect, from Moore’s Law’s power, to the potential for catastrophic system failures. … And what does that make hedge-fund managers? It makes them Wall Street’s hackers–technology-fueled usurpers of the financial status quo.”

Yipes, pretty scary, which is kind of sexy again!

In any case, our deeply unsexy D: All Things Digital (unless you consider a demo of Microsoft’s Surface coffee table enticing) welcomes Paul to the conference game.