The sharks are coming from all directions. The majority shareholders of Yahoo’s operations in China and Japan want to buy out Yahoo. So much so that there are reports that they may try to bid for the whole company. Others may be putting together bids as well. And this time no one is talking anything like the premiums that Microsoft offered back in 2008. Why would they when Yahoo has been so weakened?

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As I noted yesterday, there are lots of reasons for Qualcomm to want Atheros, not the least of which is its extensive customer list.

Qualcomm’s specialty has always been in CDMA technology, the flavor of mobile phone technology favored by Verizon Wireless and Sprint, and it collects considerable royalties around its patent portfolio there. It has struggled to penetrate other markets, and last year shuttered its FloTV operation amid minimal demand. The good news was that it sold its FloTV spectrum to AT&T for $1.93 billion, which is no doubt offsetting the cost of this deal. Add that to the $10.3 billion in cash and short-term investments on its balance sheet as of Sept. 26 and this is an easy deal to do.

It’s also the biggest deal in Qualcomm’s history and the first significant one under CEO Paul Jacobs, who is the son of founder Irwin Jacobs.

Atheros shareholders have plenty of reasons to smile today as well. The company’s stock price surged by 19 percent yesterday. At $45 a share, Qualcomm is paying more than Atheros has ever been worth in its entire history as a publicly held company. As Shira Ovide over at Deal Journal notes, its highest price before yesterday was $43.90. Happy New Year, indeed.

I caught up with Qualcomm Executive Vice President Steve Mollenkopf and Atheros CEO Craig Barratt to talk about the deal.

NewEnterprise: Steve, let’s start with you. What got Qualcomm interested in Atheros?

Mollenkopf: Historically Qualcomm has been focused on the cellular phone, though recently we’ve done much more than that. We had some integration relationships with some companies that allow us to deliver a platform to our customers. They’re essentially technical relationships, and one of those companies was Atheros. So we were familiar with them. But the real reason, the why Atheros and why now question comes down to this. We think the industry is moving to a place where a lot of the technology and use cases that are being created as part of the shift to smartphones will be used outside of just phones, and will move into many adjacent spaces. The requirement of technology and different customers overlap a lot with Atheros. They’re a leader in their space, we’re a leader in ours and we want to go into markets that will require the expertise from both of us. It seemed natural, actually.

Craig, the idea for the acquisition seems to have grown out of an existing partnership. When did the talk turn from being Qualcomm’s partner to becoming part of Qualcomm?

Barratt: The partnership has gone on for about five years, where we’ve cooperated on joint reference and designs and software and feature integration. Over the years we’ve broadened out from Wi-Fi, Bluetooth, GPS, powerline and optical networking. We do have a much more horizontal business. Qualcomm has a very strong vertical business. Through our partnership we saw the teams had a good cultural fit, the engineering teams really respect each other. When we looked at our own strategic imperatives over the long term, we saw that cellular technologies are going to be applied in a much broader markets over time, beyond just smartphones and tablets. There’s an intersection between the Qualcomm technology and our technology, and that’s only going to increase. You’ve probably heard that set-top boxes and things like that are going to start to run Android. So a lot of these mobile technologies are going to start showing up in things like the connected home. Strategically it all started to make sense.

And what will your new job be at Qualcomm?

Barratt: After the acquisition closes, which should be in the first half of 2011, my role will be president of Qualcomm Networking and Connectivity, reporting to Steve.

Steve, if I’m not mistaken, this is the biggest deal that Qualcomm has ever done.

Mollenkopf: You’re correct. For us on the Qualcomm side this is a big step toward expanding our business beyond our traditional platform business and we’re doing it in a way that is in line with how the industry is changing. A lot of the things we’ve been doing with Atheros are things we’ve already been doing as part of our relationship, so this is a natural next step.

In a statement, the bank said it “sincerely apologizes to [Jason] Goldberg for this misunderstanding. This situation had nothing to do with the content of his web site and any comments by our staff to the contrary were incorrect; we are reviewing what happened.” But questions remain about the bank’s policies; Deal Journal reported last week that a business selling underwear online was denied a Citi account because of the bank’s concerns about content.

Mr. Goldberg, whose site fabulis recently received $625,000 in funding from investors led by The Washington Post Co. (WPO), said in an interview that he opened a business account with Citi and deposited that seed money into the account last month. Earlier this week, he said, he found himself unable to access the funds. He blogged about his experience, describing repeated conversations with Citibank staff in which he says they told him about a review process that found the content of his site was not in compliance with the bank’s policies.

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That has all changed, as seen in two deals in the past week. On Sunday, Microsoft (MSFT) sold its digital advertising agency Razorfish to French advertising giant Publicis Groupe. This followed closely on the heels of Google’s (GOOG) sale of its Google Radio advertising business to WideOrbit, a closely held company with a leading position in managing advertising on cable networks.

These deals give an indication of how the circle of competence for the two technology-led giants has changed. A decade ago, a key differentiator of a digital agency was technology and its understanding of how the then-mysterious internet functions.

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The joint venture Nokia Siemens (NOK) appears to be learning this lesson the hard way this week, after its North American Operations president, Sue Spradley, was quoted as saying it would be interested in buying “other” assets of Toronto telecommunications-gear maker Nortel (NT) Networks, which filed for bankruptcy-law protection in January.

“If other assets come on to the market, we will look at each one for their value and if there is something there, we will do a deal,” Spradley said at an Economic Club of Canada luncheon this week, according to the Canadian Financial Post.

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The Internet web search and ad company’s chief technology officer, Ari Balogh, told the Reuters Global Technology Summit that Yahoo is looking to buy companies that will enable it to become a bigger player in social networking and revamp its family of products.

Balogh’s statements shouldn’t come as a complete surprise. Social networking remains a growth business, albeit one that has been hard to monetize. Yahoo has had it shares of stumbles trying to enter the space. In the past few years, the company has shut down or essentially shut down two of its previous forays into the business–Yahoo Mash and Yahoo 360, according to paidContent.org. Yahoo also fell short in its attempt to buy Facebook for around $1 billion three years ago.

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In the past few years, the telecommunications company has been shedding slow-growth businesses as it focuses on its wireless and FiOS businesses. While the deals have served Verizon well, they haven’t worked out as well for those acquiring the assets–at least in three cases.

Wednesday, Frontier Communications (FTR) embarked on this path. The rural telecommunications operator agreed to acquire 4.8 million access lines in 14 states from Verizon in a deal valued at $8.6 billion. Will Frontier face the same fate? Perhaps not.

“The problems with those deals had nothing to do with Verizon or how the deals were structured. The companies had operational problems after the deals closed,” a Verizon spokesman said.

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And no, this isn’t a blog post from 2006.

A group including KKR, Warburg Pincus, Providence and Elevation Partners recently teamed up to back the founders of Skype in an attempt to buy back their free Internet calling service from eBay (EBAY), according to people familiar with the bid.

Founders Niklas Zennstrom and Janus Friis originally approached eBay about repurchasing Skype, which acquired the service for $2.6 billion in 2005. eBay encouraged them to make an offer, and the Scandinavian billionaires rounded up a group of private-equity firms to back them, the person familiar with the bid said.

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VMware was bought for $625 million by EMC in 2004, went public in 2007 and soon hit a market cap of $48 billion. It currently trades at about a quarter of that value.

Even the hottest stock can’t defy gravity indefinitely. Or can it?

Let us take Salesforce.com. The San Francisco software company has been orbiting the stratosphere ever since its IPO in 2004. Its shares went public at $11. Last month, the shares peaked at more than $75.

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Re: Wacky–even by Google standards–stock market schemes

Google (GOOG) –let me get this straight–is apparently considering buying just under 20% of Yahoo (YHOO) shares at some elevated price, according to a post on TechCrunch yesterday, “although the goal isn’t so much to close the deal, which would almost certainly be opposed by U.S. regulatory agencies. But rather to throw another curve ball at the Yahoo Board…”

Excuse me for a second, as my brain just exploded. While I don’t doubt TechCrunch had a good source on this report, it just goes to show the level of kooky desperation and out-of-control emotion that Microsoft’s (MSFT) unsolicited bid for Yahoo has had on all the parties involved.

Were Google to actually take wacky advice like this, I would worry about more than its recent stock drop. Such a move is neither savvy nor effective (after all, Google cannot shimmy its way out of the fact that it just really just cannot have Yahoo, in whole or part, because of its huge market share in search and search advertising).

Why? It just makes me a little nervous if Google, a major U.S. corporation with lots and lots of government rules and regulations to follow, is contemplating “pretend” buying of shares of Yahoo to trip up rival Microsoft, as if it were a kid playing a stock market equivalent of Ding Dong Ditch (see helpful video below on how to do a successful DDD).

Quoting an anonymous adviser to the deal, the TechCrunch post noted: “It’s a relatively cheap way for Google to confuse the situation further, and, potentially delay or disrupt a Microsoft acquisition.”

Well, if $10 billion or more, along with inevitable shareholder lawsuits, is cheap, I guess so!

OK, not so much. But the scheme concocted by anonymous wheelers and dealers sure wins points for being interesting. And creative. I might even say: crazy like a fox.

But let’s just stick with crazy, shall we?

For a little better take on the situation, try the excellent (and, more importantly, accurate) analysis of the stock situation around the deal by The Wall Street Journal’s Matthew Karnitschnig of the Deal Journal blog posted yesterday too, which I post in its entirety below (also, a picture of what Microsoft might look like if it manages to swallow Yahoo whole):

Yahoo’s Deteriorating Defenses Against the Microsoft Bid

Like a coiled python eyeing its quarry, Microsoft appears content to wait for Yahoo to exhaust its defenses before moving in for the kill.

To understand Microsoft’s sanguine approach, look no further than Google’s share price. Until Microsoft made its offer for Yahoo on Jan. 31–-then valued at $44.6 billion–-Google and Yahoo were both down about 18% on the year. Yahoo has jumped about 50% since the offer; Google has fallen a further 16%.

Part of Google’s slide is connected to concern that a combined Microsoft/Yahoo would cost it business. Still, investors appear most worried about a decline in Google’s advertising revenue. Those concerns sent its shares to a nine-month low Tuesday.

One needn’t be a certified financial analyst to surmise that were it not for the Microsoft bid, Yahoo, which faces the same challenges in the marketplace as Google, also would be getting thrashed in the stock market.

If Yahoo shares suffered the same percentage decline as Google’s have since the Microsoft offer–not an unfair assumption considering Google stock rose 12% in the 12 months before the offer and Yahoo’s fell about 35%–then Yahoo would now be trading at about $16. That is about half of Microsoft’s original $31-a-share offer, which Yahoo dismissed as “undervalued.”

If Google’s stock keeps dropping, the Yahoo board might want to solicit a new valuation. Because if Microsoft does strike, the attack is likely to be unrelenting. Microsoft won’t crush any bones, but its objective is the same as the African python’s: to swallow its prey whole.

Please see this disclosure related to me and Google.