BoomTown has been in Redmond, Wash. today to attend Microsoft’s annual Financial Analyst Meeeting, where top execs from the software giant have been taking the stage to talk about All Things Microsoft.

I liveblogged this morning’s sessions here, and now the afternoon opened with CEO Steve Ballmer.

The pugnacious exec has been under a little bit of pressure from Wall Street, due to the company’s naggingly limp stock price, even though Microsoft (MSFT) just turned in record results for its fourth quarter

He has even been subject to an ongoing series of rumors, scuttling around the tech sector, that Ballmer would even be replaced due to the moribund shares.

That did not happen today, with Ballmer appearing as confident as ever, very loud and proud, hanging out and kibitzing with investor dudes (they are all dudes here, for the most part) at the technology showcase after the morning session.

Like a particularly aggressive tour director on “The Love Boat,” in fact, he even ordered the analysts to go see all the stuff on display, such as a mobile data center, Windows 7 Phones and its gesture gaming technology now called Kinect.

We complied.

After a lovely lunch, here is a report of the action at the afternoon session at FAM:

1 pm PT: Ballmer took to the stage to talk about Microsoft’s consumer businesses.

First to get praise: Xbox, a money-losing, but very innovative business.

Read the screen: FY10 A Great Year. FY11: Even better.

Ballmer was hot on Kinect, which will be “wow.”

Next: Bing!

Share was from eight to 12.7 percent, frequent releases, mobile focus and strong brand awareness.

Yay. Except the part about Google (GOOG) still having a 70 percent share of the search market.

“We’re not confused, we have a lot of work to do here,” said Ballmer, who noted the price tag for competing in search was high. “It’s going to take a lot more.”

A lot.

Office 2010 was next and it’ll be cloudier, touchier, socialier than ever.

Next up: Windows 7–a definite home run, with an almost 93 percent share on laptops.

“Suffice it to say, Windows is the tide that floats all boats,” said Ballmer.

That is, of course, except that PCs are being inevitably supplanted by many other types of other consumer devices.

Thus, Ballmer moved onto tablets, which he called slates and convertibles.

He took some shots at Apple (AAPL), and promised something would be coming soon.

It better.

Ballmer did admit the truth: “They’ve sold certainly more than I’d like them to sell, let me just be clear about that.”

Then it was onto a demo of some new stuff, including the availability of a “Personal Cloud” for users of Windows 7 and Windows Phone 7.

Essentially, as many companies have been trying to do, it a way for consumers to have access to photos, music and more anywhere on any device.

There was also a new Windows synch feature, which is part of this anything-anywhere-anytime-any device theme.

At this point in the afternoon, I have to say that the thought of a hyper-sharing world of endless data shooting all over the place was exhausting.

I suddenly started thinking about starting a site called Hermit.com–please don’t visit, as I have nothing to share with you and I don’t care what you’re doing either.

Where were those sugary donuts, Microsoft?

I perked up at the demo of the Windows Phone 7, which is very slick and looks terrific. As with Bing, it is nicely differentiated from Apple’s iPhone or Google’s Android mobile operating system.

There is some nice automatic integration in the Windows 7 Phone with Facebook, the powerful social networking platform, with cool blue dots as the updating signal.

2:06 pm: Ballmer was back, declaring he’s not only a PC, but “I’m a Phone too!”

Not quite as catchy a motto, but I like the effort.

Ballmer also touched on Microsoft’s retail stores, which I like to call Not-Apple-But-They-Look-Like-Them Stores.

Next up: CFO Peter Klein, whom I have never seen in person. Let me say, compared to most Microsoft execs, he is unusually young looking, as if he just got his driver’s license.

But he is clearly a smartie, pulling out all the big graphs of money stuff, discussing the economics of the cloud and how it will will result in profit growth.

Many wish the boxed software business did not have to die, but it is on its last legs, so it’s time to hug the cloud for dear life

Klein’s argument that it will all be okay: Microsoft will sell to more users, they’ll earn more per customer and customer satisfaction is increased.

He walked through the numbers, which have been good, noting he hoped for more of the same.

2:31 pm: It’s Q&A time, with Ballmer coming out and calling for “ENERGY!” from the group.

If there were donuts, perhaps! Otherwise, it’s more of a snoozy afternoon situation. Zzzzzzz.

While waiting for other execs to get onstage, Ballmer made a kind of humble-pie statement for shareholders, noting he is a big one too and wanted the stock price higher.

“I’m all in,” he declared, noting he still held 86 percent of his shares in Microsoft since he arrived decades ago.

Of course, that 14 percent represents billions of dollars to have to scrape by on.

The first question was: Wassup with tablets? “It feels like right now you are not completely clear,” said the questioners.

Ballmer was a bit defensive, with his voice going up and up some more. It’ll use Intel (INTC) chips and Windows, but he was still not more specific.

“We’ll be in market as soon as we can,” he said, which was to say that he was not saying.

The next few questions were about financial details and costs. Again, Ballmer noted the returns were strong and other execs said the company had discipline.

More about the cloud, which COO Kevin Turner continued to declare was a big focus. “The proof’s in the pudding,” he said. “But clearly, we have to execute.”

Another question about the tablet, which seemed to annoy Ballmer, who made a lot of noise about being ready to compete.

One tidbit: The Windows 7 tablet will print.

Wheeeee!

After declaring Google’s Android, a “weird collection” of phones, he repeated that Microsoft was all in with its tablet.

Well, get in then!

A good question is asked about what Ballmer thought would be a good sign of progress on mobile phones a year from now.

Well, more share and to stop the downward slide of it.

Then a key question: What if Windows 7 Phone does not work, if it is like the failed Vista operating system software.

For the first time, Ballmer answered quietly: “It won’t be.”

And, then much louder, he’s all in.

Rhapsody, along with Best Buy’s (BBY) Napster, sell music via monthly subscription, as opposed to Apple’s (AAPL) a la carte download offering. But neither service has been able to gain much traction, despite years of effort.

Real Networks (RNWK) currently owns 51 percent of the Rhapsody, which it started, and Viacom’s (VIA) MTV the remainder. Restructuring will give both companies a 49 percent share, and “one or more minority stockholders” will own the rest.

There are a few other details, spelled out in the SEC filing below (for instance, Real needs to pony up some cash, and MTV gets released from some of the marketing agreements it signed on for a couple years ago). But the takeaway is this: Both companies get to move the money-losing music service off their books, and the new structure may theoretically give them a better chance of finding a buyer for the thing.

Last month Real’s founder, Rob Glaser, announced he was stepping down from the company’s CEO spot. But this reorg has been in the works for a bit: Real alerted shareholders to a possible move back in November.

Here’s the relevant text from the SEC filing:

On February 9, 2010, RealNetworks, Inc. (“Real” or “RealNetworks”), RealNetworks Digital Music of California, Inc., a wholly owned subsidiary of Real, MTV Networks, a division of Viacom International Inc. (“MTVN”), DMS Holdco, a wholly owned subsidiary of Viacom International Inc., and Rhapsody America LLC, a Delaware limited liability company (“Rhapsody”) and joint venture formed by Real and MTVN (together with the other parties listed above, the “Parties”), entered into a Transaction, Contribution and Purchase
Agreement (the “Transaction Agreement”), which contemplates a restructuring of Rhapsody. Real and MTVN formed Rhapsody in August 2007 to jointly own and operate a business-to-consumer digital audio music service. Real currently owns 51% of the equity of Rhapsody and Viacom owns the remaining 49%.

At the closing of the transactions contemplated by the Transaction Agreement, Rhapsody will be converted from a limited liability company to a corporation, and the Parties expect that Real and MTVN and one or more minority stockholders will hold the outstanding shares of Rhapsody such that Real and MTVN will own slightly less than 50%, but an equal amount, of such outstanding shares. Real will contribute $18 million in cash, the Rhapsody brand and certain other assets in exchange for shares of convertible preferred stock of Rhapsody, carrying a $10 million preference upon certain liquidation events. A portion of Real’s cash contribution is to repurchase the international radio business that was previously contributed to Rhapsody. MTVN will contribute a $33 million advertising commitment in exchange for shares of common stock of Rhapsody, and MTVN’s previous obligation to provide advertising of approximately $111 million as of December 31, 2009 will be cancelled. In addition, both the Stockholder Agreement, dated as of August 20, 2007, between Real and Viacom International Inc., on behalf of MTVN, and the Limited Liability Company Agreement, dated as of August 20, 2007, among the Parties will be terminated, including the put and call rights held by Real and MTVN and MTVN’s rights to receive a preferred return in connection with the exercise of Real’s put right.

Real expects that the transactions contemplated by the Transaction Agreement will be completed late in the first quarter of 2010, subject to the satisfaction of customary closing conditions. At the closing, the Parties will enter into a Stockholder Agreement that contains provisions regarding the governance of Rhapsody, stock transfer restrictions and approval of certain corporate transactions. Rhapsody will
be initially governed by a Board of Directors with two directors appointed by each of Real and MTVN and one independent director appointed by mutual agreement of Real and MTVN. At the closing of the transactions, the Parties will also amend certain existing agreements, including the expansion of the technology and intellectual property licenses from Real to Rhapsody relating to the core technologies for the Rhapsody audio digital music service to provide worldwide, perpetual licenses and certain rights for use of the core technologies in business-to-business audio music services.

Upon the completion of the transactions contemplated by the Transaction Agreement, Real expects that it will no longer consolidate Rhapsody’s financial results with Real’s consolidated financial statements.

Quite a bit higher, it turns out.

$1.95 billion is the company’s market cap as of March 27, when it had 137.84 million shares outstanding. But this figure doesn’t include preferred shares, etc. So Palm’s true valuation–equity valuation with convertible preferred shares, exercisable and nonexercisable in-the-money options, warrants and whatnot–at its current share price of $13.87 is about $2.9 billion.

$423 million to $2.9 billion in 12 months.

Turnaround story of the year. For now, anyway….

This weekend on Twitter, someone paid BoomTown a compliment of a sort: “I read you because you are a solid fact-based reporter with a Miss Cleo intuition :)”

Yipes, because of being fact-based, I had to point out that the well-known-via-infomercials Psychic Friends Network shaman turned out to be a bit of a fraud, although she’s always entertaining, with her jaunty Jamaican accent (she was not, of course, from there).

Nonetheless, it got me thinking about how I would predict what would result from all the deal-making that is suddenly in the air, after six months of ennui from the current economic downturn.

While Silicon Valley has been less impacted than, say, New York, things have certainly been tightening up here, with layoffs at big companies and small ones and less frenetic activity than one had come to expect from Web 2.0.

But last week, the pulse seemed to quicken a little with the various rumors that have swirled around Twitter, the variety of controversies around Facebook and the nascent chit-chatting now taking place between Yahoo (YHOO) and Microsoft (MSFT).

Thus, with a third eye to the future, here’s my take on what could happen. Big caveat, though: Much of what follows is all my speculation and analysis and not based on any psychic feelings.

TWITTER TWADDLE

Last week, I did a rather long reported post on what was going on after rumors broke out that Twitter was in “late-stage” acquisition negotiations with Google (GOOG).

While an imminent deal was not pending two weeks ago, I wrote that Twitter was indeed the apple of Google’s eye at the moment–specifically and now more so than ever, many sources tell me, of its Search Product VP Marissa Mayer–for some kind of search deal that could eventually lead to an acquisition.

But I also noted that Microsoft was also in the picture, vying for Twitter’s affections, and I doubted that Microsoft and Google would be the only ones interested in the hot-as-July-in-Alabama microblogging start-up.

Here’s the plus for Twitter: It’s on a hype rocket ship, its growth is also accelerating and it does not need money, since it just got a big slug of venture funding.

And that’s also a minus and why I also predict that there are only two outcomes: a sale very soon or a major investment by one of its suitors.

While I would love for its founders, including Biz Stone and CEO Evan Williams, to stick to their claims of remaining a “strong, profitable, independent company,” a cash offer of over $500 million or a cash-and-stock offer of slightly more will probably be enough to take them off the table, mostly because the getting might never get this good again.

That offer is most likely to come from Google, if I had to make a bet, which is well known for moving quickly when it sees a tasty treat it desires.

That’s a shame, since once the start-up actually does enter these kinds of “late-stage” talks for real, some deserved shine will come right off Twitter’s cute little MINI convertible of a company.

Instead, Twitter might want to take a page from Facebook and let itself grow its own as it explores revenue options, while perhaps taking a large investment and striking a significant commercial deal with a strategic partner like Google or Microsoft.

Then, with a modicum of independence and the possibility of acquisition if it turned out it needed help, Twitter could forge its own destiny.

And wouldn’t that be nice if Google or Microsoft didn’t just gobble up every innovative thing they cannot seem to think of on their own?

FACEBOOK FOLLIES

I will be reporting more very soon on what’s been going on as the powerful social-networking site deals with its fast-growing pains–up to 200 million users now, which is about as impressive at it gets in the Internet space.

Not so impressive is the variety of high-profile management mishaps that have plagued the company of late–from its Terms of Service debacle to its redesign rough road to the way Facebook recently parted with CFO GIdeon Yu.

To say Facebook treated Yu–a well-regarded figure in the tech sector, who had also raised an awful lot of funding for the start-up–with very little of the kind of grace he deserved and that it should have displayed is an understatement.

In the creation of a significant start-up, tensions inevitably flare and there is typically a lot of management turnover, which is natural, for a variety of reasons on all sides.

Why Facebook had to insecurely tout its stable financial state while backhandedly slapping Yu by saying it was in a search for a CFO with “public company experience”–Yu had enough public company experience to make that deeply insulting–was unclear, when it simply could have said he was moving on in the way most such partings are done.

The conflict between its public statement and an internal memo I obtained on Yu’s departure underscored the problem.

Insecure and way too focused on optics is probably an issue Facebook will have to deal with as it moves toward what the company hopes will be in IPO in 2010 or 2011. Rather than all the noise, its only goal should be shaping up its revenue and profit performance and, hopefully, building a cohesive management.

But does that mean current CEO and founder Mark Zuckerberg will have to eventually step aside before a public offering and make way for a more experienced CEO type, as Google co-founders Sergey Brin and Larry Page did for Eric Schmidt, as some have suggested?

I predict not. Because, for all his careening from crisis to crisis of late, I have no question that Zuckerberg–who has fended off big-money acquisition attempts by big players with a cool-cucumberness that Twitter’s execs should study carefully–has every intention of riding Facebook to the very top–or even bottom.

Clearly modeling himself as a modern-day Steve Jobs (who was fired before triumphantly returning) or Bill Gates (a better comparison), Zuckerberg is a visionary techie who wants to style himself as a crack businessman too.

And with a lot of control over the fate of Facebook, he’s going to see his vision of Facebook and himself out.

THE ODD COUPLE

Can two divorced men share an apartment without driving each other crazy?

Oops, I mean can two once-bickering-over-a-hostile-takeover companies start talking without driving each other crazy?

Last week, the news, first reported here Friday, that Yahoo was involved in preliminary talks with Microsoft about an extensive commercial advertising and search partnership–should have come as no surprise.

After all, Yahoo and Microsoft are laggards in the lucrative search space, especially compared to the dominant Google, and they must somehow find a way to get along to get some traction in the marketplace.

But will they or will it be all Felix Unger and Oscar Madison battling until the end of time? While I loved that television show, and movie too, the Yahoo-Microsoft version is not riveting anymore to some.

“I am so bored with their not-coming-to-a-deal,” said one prominent exec, who was involved in the first go-round between the companies. “They need to make a deal, and if they don’t make a deal now, I will be both bored and in shock.”

That made me laugh out loud when I heard it. But it’s not funny, I know, because this is serious stuff!

Okay, then, seriously, this pair needs to come to some sort of partnership agreement like Miss Cleo needs a new reputation.

And, because I am a hopeful psychic, I predict they finally will, dropping all the emotion and history and realizing that they are wasting time and opportunity.

After all, while the future isn’t written, it can–a lot of the time–be both inevitable and utterly obvious.

Speaking of obviously (bogus), here is a video of Miss Cleo’s famous commercial:

Please see this disclosure related to me and Google.