This is exactly the sort of problem I predicted in January. That Hurd, who is also a former CEO of Hewlett-Packard and of NCR before that, and Gelsinger, a former CTO of Intel once considered a possible successor to Paul Otellini, have been approached is not surprising, given their tech and managerial bona fides. Nor is the fact that they turned the job down.

The third name jumps out at me simply because I’m not familiar with Greg Summe. His bio on the Carlyle Group site says he spent 20 years as chairman and CEO of PerkinElmer, the $2 billion health sciences company, and before that, he ran the Avionics business at AlliedSignal, now part of Honeywell.

The search is being run by Heidrick and Struggles, Bloomberg says, and the fact that Summe was approached indicates how widely the company is casting its net. The clock, however, is ticking. When I last spoke to someone at the company, not directly involved with the search, I was told that the plan was to have a new CEO named before its next earnings report, scheduled for July 21. That’s 36 days away.

Historically, this is unlike AMD, which has always taken care to have a managerial bench, and like most big companies, has typically had a CEO successor waiting in the wings. Former CEO Dirk Meyer (pictured) was named COO in 2006, tapped by then CEO Hector Ruiz, who had himself been recruited from Motorola’s Semiconductor unit (now Freescale) to succeed AMD’s founding CEO, the colorful Jerry Sanders. Ruiz, however, had been recruited in 2000 because of the surprise resignation in 1999 of AMD’s heir apparent, Atiq Raza, who’s now a tech investor, backing, among others, Violin Memory.

That’s not to say there aren’t internal candidates who could step up. Rick Bergman, senior vice president and general manager of AMD’s products group, has been mentioned as on the list for consideration, though the board has favored an external candidate from the start. But the company has been bleeding talent. Two other internal contenders bolted in February — Bob Rivet, AMD’s onetime COO under Meyer, and Marty Seyer, the well-regarded senior vice president for corporate strategy, who in 2006 personally landed the deal to sell the first AMD server chips to Dell (until then an Intel-only shop) and had been known to occasionally jam with Ruiz on the electric guitar. Other senior managers are bailing out as well. Just last week Jeff VerHuel, corporate vice president of platform strategies, left AMD to join SMSC as its head of engineering.

Meyer’s sudden departure is said to have come after a row with the board of directors, impatient that AMD is not showing up in any meaningful way in the market for chips for mobile devices. The days when it was dealing perennial market leader Intel bruising punches in the punishing business of selling server chips are over. And its overall share of the market for PC and server chips has slipped to 13.2 percent versus Intel’s 86.5 percent as of March, according to Mercury Research. It still makes a compelling case as an alternative supplier for chips in notebooks and desktop PCs, as The Wall Street Journal reported yesterday, but Intel’s lead, given its powerful manufacturing infrastructure — AMD no longer owns its own factories, opting instead to farm those duties out to GlobalFoundries, its onetime manufacturing arm — will as the years progress prove ever more difficult to erode even incrementally.

And even trying will increase the operational costs of an already profit-challenged company. AMD delivered profits in 2009 and 2010, but only after undergoing a massive restructuring to rid itself of its manufacturing operations. Still, the profits are thin: In 2010, AMD reported income of $471 million on sales of $6.5 billion. Compare that to Intel’s $11.5 billion profit on nearly $44 billion in sales, and you see how hard a time even the new, leaner, fabless AMD has competing with Intel.

Competing with Intel for share of its traditional markets is hard enough. If AMD’s board is determined to push the company into the business of selling chips for mobile devices, the path to success looks nearly impossible. Just look at the troubles Intel is having in that space competing with ARM Holdings and its numerous licensees, which include Nvidia, Qualcomm, Broadcom, and Texas Instruments to name but a few. When it comes to mobile devices — tablets and smart phones — ARM-based chips are as ubiquitous as x86 chips are in PCs and servers: They are the standard. Intel’s low-power Atom-based chip has so far been largely unsuccessful in penetrating that business. And if Intel is not scoring any significant wins there, why would anyone want to take on the job of leading AMD into a likely failure? No wonder potential candidates are finding it easy to say no. Bloomberg quotes Gelsinger: “I said no, and I said no again.”

So where does that leave AMD now? There are two paths. First, consider an internal candidate to lead the company. As more external candidates spurn AMD’s approaches, the list of objections AMD’s board may have to hiring internally could shorten. Bergman may get a second more serious look.

The other is to sell the company to someone bigger. That’s another complicated question, mainly because with the terms of its settlement with Intel (or what I like to call the Treaty of Maui) and the terms of its complicated patent-cross licensing agreements that date back the the 1980s, any buyer would have to first pass muster with Intel or find themselves in a very expensive lawsuit. Then there’s the fact that AMD is 20 percent owned by Mubadala Development Company, the investment arm of the Arab Emirate of Abu Dhabi. Buying AMD — at current valuations it would take about $7 billion — would be, to paraphrase Steve Jobs, a “big bag of hurt.”

Even private equity players who specialize in buying troubled companies, fixing them up and spinning them off at a profit, are wary of AMD, having learned well the lessons of the disastrous 2006 buyout of Freescale by the Blackstone Group, Carlyle, TPG Capital and Permira Advisers.

Ultimately there will be no easy options at AMD. No surprise, its shares are trading down by 11 cents or more than 1 percent as of 9:45 am New York Time this morning.

To finance the buyout, Blackstone Group LP, Carlyle Group, Permira and TPG Capital plunked down $7 billion of their own money and borrowed the rest. Freescale returned to the public markets Thursday at an initial offering price of $18 a share, which its bankers cut from an expected range of $22 to $24.

Freescale’s shares rose 1.8 percent to $18.33 on their first trading day, valuing the roughly 82.5 percent stake still held by the private-equity firms at just $3.8 billion. But if heavily indebted Freescale performs well, their investment could still turn into a winner.

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Other investors in the company include KKR, Thomas H. Lee Partners, AlpInvest and Hellman & Friedman.

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Recently–in the echo chamber that is Silicon Valley–several people told BoomTown quite separately that former Yahoo President Sue Decker had become an executive-in-residence at the Blackstone Group.

Actually, when reached via email, Decker told me she has yet to decide her next step after leaving Yahoo and had simply set up a no-strings-attached desk at the private equity firm’s San Francisco office, but is definitely not an EIR there.

And who says bloggers don’t check?

In fact, a move to join Blackstone formally would have been very ironic for Decker given that the firm–specifically, longtime friend and former colleague, Jill Greenthal–was one of the advisers to Microsoft (MSFT) in its failed takeover battle for Yahoo (YHOO), a fact that was highlighted in a post I did last year.

Instead, Decker has been keeping a low profile since she announced she was resigning from her post the very day new Yahoo CEO Carol Bartz arrived.

Decker was also a candidate for the top job, which she sought after sticking by former Yahoo CEO and co-founder Jerry Yang through some very rough times for both.

Her last day at Yahoo, after nine years there, was April 1.

In the email, Decker explained that she has not yet made any future work-related plans, but had simply taken up an offer from Blackstone’s President Tony James, as well as Greenthal, who suggested she could set up a small office there to attend to board work. The three all used to work together at Donaldson, Lufkin & Jenrette.

Even without an executive perch, Decker could use such a desk given that she sits on some very major boards, including Intel (INTC) and Berkshire Hathaway (BRK.A).

More than that, Decker–who sounded pretty happy to me–is not saying. Yet.

That’s one lesson you might derive from this odd lawsuit: The Financial Times is suing Stephen Schwarzman’s Blackstone Group (BX), claiming that the private equity group has been defrauding it since 2002. How? By allowing multiple people to use a single account to access articles on the paper’s FT.com site.

The FT figures that this was done with the approval a “senior” Blackstone finance executive and constitutes a “massive” crime since a yearly subscription to the paper’s Web site costs up to $299 a year. It’s suing Blackstone for copyright violation and computer fraud. (Redundant disclosure: The FT competes with The Wall Street Journal, which owns this Web site and which also charges for comprehensive access to its Web property.)

And if you’re thinking this seems like an odd way for a powerhouse publisher to settle a billing dispute with a giant private equity company (even after the economic meltdown, Blackstone sports a $1.2 billion market cap), well, you’re not alone. I double-checked with an FT spokeswoman who told me that the company had no comment, but confirmed that the complaint below is indeed real.

Thanks to CityFile for pointing this one out.

Black Stone

One of the more unusual situations in the current stand-off between Yahoo and Microsoft is the stress it has likely put on the longtime professional relationship and personal friendship between Yahoo President Sue Decker (pictured here) and Blackstone Group’s Jill Greenthal.

That’s because Greenthal (pictured here) is advising Microsoft on this deal, along with Chuck Cory and Paul Taubman of Morgan Stanley (who was actually Time Warner’s banker in its disastrous AOL deal).

Yahoo is being repped by Goldman Sachs, Lehman Brothers and Moelis & Company, an advisory boutique. All the firms on both sides stand to reap hundreds of millions in fees, if the deal is consummated.

Greenthal is a good pick for Microsoft to get the job done. She has a long-time knowledge of Yahoo, having worked with the company when she was at the Credit Suisse Group on the $1.45 billion purchase of Overture, one of Yahoo’s smarter purchases.

And her ties to Decker go back even further, when Greenthal was a banker at Donaldson, Lufkin & Jenrette. The pair worked together frequently at DLJ, where Decker was an analyst and research director before heading to Yahoo.

Back in 2003, in a BusinessWeek profile of Decker, Greenthal noted about Decker’s tenure at DLJ: “[Executives] didn’t always like her opinions of their company or industry, but they respected her.”

A source in Silicon Valley who knows both Decker and Greenthal said that the two have avoided speaking since the unsolicited Microsoft bid was launched by Microsoft CEO Steve Ballmer in an evening phone call to Yahoo CEO and Co-Founder Jerry Yang two weeks ago.

But one might also imagine their bond could also become a critical bridge in bringing the companies to finally make a deal, as many big shareholders are urging and Yahoo has been resisting.