“You know, we value our independence, and we continue to think that we just have tremendous opportunities ahead of us as a company,” Narayen said in an interview with Fox Business Network today. “The macro trends that are driving our business, creating content, monetizing it, managing it, and delivering that value to our customers, that is what we’re focused on as a company. We have tremendous strategic partnerships not just with Microsoft. We have partnerships with Google and with Apple, as well as with all media companies who use our creative tools to produce content….

“We partner with Microsoft and the partnership with Microsoft is all about making sure that our creative applications, which are the best-selling creative applications in the world, work really well on the Windows platform. So, that is the nature of the partnership with Microsoft.”

“There would be no question that I would be perfect to run it,” Karmazin said. “But there is no chance that I will ever take another job outside of Sirius XM. I just renewed my contract. It’s exactly what I want.”

Exactly what he wants, except maybe for that perennially-under-a-dollar share price–though according to Karmazin, that’s going to change. “I think today, you’ll start to see quarter after quarter of growth,” he said. “You’ll see us making free cash flow. You’ll see us with…over $2.5 billion of revenue. We’ll start to make money, and we’ll start to keep investing in content. And I think our future will be great.”

Unassuming guy, that Karmazin…

And there it was in Yahoo’s second-quarter earnings call yesterday, when–as the first question–an analyst asked Yahoo CEO Carol Bartz what she thought about Bing, the new and innovative search offering from Microsoft.

“I think actually Bing is a good product,” said Bartz. “I think they’ve done a good job. I think Microsoft should be given kudos for Bing.”

It was a politic thing to say, to be sure, especially with Microsoft (MSFT) and Yahoo (YHOO) still zeroing in on a search and online advertising deal, as has been previously reported by BoomTown.

Sources I have spoken to over the past two days say the deal is still on good footing and could be struck very soon, even as early as tomorrow, although it is still not a certainty–especially given the bumpy history between Yahoo and Microsoft.

Thus, it behooves Bartz not to let loose with one of her patented zingers–and you just know she has several at the ready, in case the deal goes south–right now when the pair of companies that I have described as the Internet’s version of the Lindsay Lohan-Samantha Ronson drama might finally agree to join together in a partnership.

That’s why Bartz did not say, “I personally think we would be better off if we never heard the word ‘Microsoft,’” as she did at an investor conference in June, when asked about a possible search and online advertising deal.

And why she did not say, as she did on Fox Business Network around the same time, about the early kudos for Bing: “One day is one day…it does not a trend make.”

And why Bartz did not say, as she scribbled on a jokey-but-pokey Post-It note to Microsoft CEO Steve Ballmer (see photo) that she left in the Green Room of the seventh D: All Things Digital conference:

“Steve,
forget it
won’t help
ha
Carol”

Nope, now is the time for some judicious happy talk from Bartz, who appears to have a lot more self-control than I have ever given her credit for.

She’ll need it, for sure, if she does actually pull off a deal with Microsoft–because that is when the real fireworks will begin between the Silicon Valley Internet giant and the Redmond, Wash., tech behemoth.

Well, I can dream, can’t I?

Or, as the perfect song, “Happy Talk,” from the classic musical, “South Pacific,” goes: “You got to have a dream/If you don’t have a dream/How you gonna have a dream come true?”

And, for those who have missed it (you cretins!), here it is in all its glory, in a video from the lovely movie version:

Not so difficult, apparently. As I noted yesterday, early data from market researcher comScore (SCOR) show Bing boosting Microsoft’s share of the search market to 11.1 percent from 9.1 percent since May 26.

Anyway…

Schmidt’s remarks recall a CNN interview he did earlier this month in the aftermath of Bing’s debut. Then as now, the Google CEO went to great lengths to tar Microsoft and its search products. “Microsoft has announced a Google killer search product about once a year for the past six years,” Schmidt said at the time. “And they need to offer a better product than the one they did last year. I think it’s too early to say with Bing how well it will do. They have some advantages because of the Windows monopoly where they can encourage people–in our view unfairly–to use Bing, but let’s see what the end users choose. We always start from the premise ‘what do the end users want’ and we continue to find in our studies that what Google offers is what they want.”

Not so difficult, apparently. As I noted yesterday, early data from market researcher comScore (SCOR) show Bing boosting Microsoft’s share of the search market to 11.1 percent from 9.1 percent since May 26.

Anyway…

Schmidt’s remarks recall a CNN interview he did earlier this month in the aftermath of Bing’s debut. Then as now, the Google CEO went to great lengths to tar Microsoft and its search products. “Microsoft has announced a Google killer search product about once a year for the past six years,” Schmidt said at the time. “And they need to offer a better product than the one they did last year. I think it’s too early to say with Bing how well it will do. They have some advantages because of the Windows monopoly where they can encourage people–in our view unfairly–to use Bing, but let’s see what the end users choose. We always start from the premise ‘what do the end users want’ and we continue to find in our studies that what Google offers is what they want.”

Well, what else is Yahoo CEO Carol Bartz going to do but talk smack?

Not at BoomTown–that was so two weeks ago!

About potential partner Microsoft, of course!

And, especially about its new Bing search engine.

And, most especially of all, since new stats from comScore (SCOR) yesterday showed that the new look and marketing push for Bing are showing promising initial signs.

According to a post by Digital Daily’s John Paczkowski, “Microsoft’s new search engine boosted its share of the search market to 11.1 percent from 9.1 percent in the last week. And it bolstered the software giant’s search penetration to 15.5 percent from 13.8 percent.”

Those results track on some other early surveys that indicate that Bing has been a good effort for the software giant, which is spending $100 million on marketing it alone.

That’s why, no surprise, No-Holds-Barred Bartz has been out on some kind of speaking tour recently, chatting up a storm about Yahoo (YHOO) and its sunny prospects.

In doing so, she has also thrown water on potential deals with Microsoft (MSFT), Bing and a few other errant issues like a possible hook-up with Time Warner (TWX) online unit AOL.

(Ixnay onway AOLWAY, by the way, say Bartz).

It is all, as anyone not just tuning in knows by now, part of the Internet company’s push-me-pull-you relationship with Microsoft, one that Bartz is taking to new levels.

At the seventh D: All Things Digital conference–exactly two weeks ago today, in fact–Bartz veered into more-positive waters about a Microsoft deal, in a lively onstage interview with me, saying that if Yahoo got a giant pile of money and good data that she was not against the sale of its search business.

And Bartz and Microsoft CEO Steve Ballmer also met while at D7, continuing ongoing partnership discussions.

Then, at an investor conference last week, she tacked negative and said she thought the prospects for the Silicon Valley icon would be “cleaner” without a Microsoft search and advertising deal.

Even better–or worse: “I personally think we would be better off if we never heard the word ‘Microsoft.’”

Those comments cleanly knocked five percent off of Yahoo shares.

Then, yesterday in an interview on Fox Business Network, while dinging any AOL merger deal–which had been discussed by her predecessor, Jerry Yang–as not happening “anytime in the forever future,” Bartz said Yahoo search was strong enough to fight for share with both Google (GOOG) and Microsoft.

And of the Bing gains in early surveys, she noted: “One day is one day…it does not a trend make.”

Well, Bartz hopes not!

That’s why she also carefully–and in an unusually modulated tone for her–kept the door open to Microsoft: “If you talk about search in general, you could partner with somebody.”

I don’t know about anyone else, but my head is spinning from all the public zig-zagging by Bartz (pictured here).

But, at the heart of it is one fact: When it comes to search, Yahoo has no true strategic alternative–except to spend on marketing and innovation, as much as Google and Microsoft can, to keep up.

Because, with Bing, Microsoft has finally presented a definite challenger to Yahoo’s search product that will likely improve with time.

With the intense marketing, Microsoft is betting it can make Bing stick with consumers for more than just one try.

The jury is still out on that, of course, but combined with the various search distribution deals both Microsoft and Google have grabbed away from Yahoo, it is more than quite possible that Yahoo could lose market share.

And, if that turns out to be more than one or two points, that could mean trouble–from investors, Wall Street, noisy media, to name a few of the most annoying–for Yahoo.

Thus, it is a dicey game of chicken that Bartz is playing, as one person close to the companies said quite succinctly: “She can ride it down or make the deal.”

My prediction: Bartz will keep up the tough talk, but–in the end–make a deal.

[T-shirt photo from Zazzle.com.]

FBN is describing the chat as an “exclusive,” which is true in the sense that it is the only one running an interview with Buffett at 4 p.m. Eastern today–he tends to be fairly visible these days. Still, there’s some good stuff here, and not all of it is depressing. Excerpts follow:

On Unemployment:

“There are going to be more people unemployed…but I’m not worried about how we come out in the end. I mean, I’m not worried about five years from now. Five months from now, can be very painful…it will be considerably higher…. It will happen eventually [surpassing 8%], and we will go on to new heights, but it will not turn around by mid-year next year.”

On Berkshire Hathaway’s Stock Plummeting:

“No, it doesn’t make any difference. I mean, if you don’t own it on margin, you own a business…. I look to the business to determine my results. I’ll say it’s happened to me three other times in my life, too. It happened when it went from 90 to 40 back in 1974, and it happened in 1987. It went down 50 percent in 1998 to 2000. I mean, I hope I live long enough so it happens a couple more times to me.”

On the Auto Bailouts:

“I would drive a deal like I would drive myself if I were buying a business. And I think, I would say there’s plan A or plan B.  And if you don’t want to do it this way, you know, then…take bankruptcy.

“I would make the CEOs buy in. I would say, you know, the United States government is willing to put in X dollars, but we’re going to have you put in a certain percentage of your net worth right along with us.  We’ll give you more upside, but you’re going to lose if we lose.”

On the Future of Goldman Sachs:

“Their businesses are all tough now, but they’re going to get around it…. This time, the institutions got very, very leveraged, and when the whole world tries to be leveraged at one time, I mean, there is a lot of pain that goes around. But you know, the Goldman’s of the world, they’re going to be around. Some of them needed, I mean, not Goldman specifically, but some of them needed the help of the TARP.”

On the President’s Role in the Bailouts:

“I think really only the president can do that effectively. I think it’s very difficult for the Congress, where you’ve got 535 people where each–you know, one guy has a plan for Chrysler and somebody else has another–and I think that–and you have to have somebody who can deliver, who can say, if you do these things, we will come up with a solution. But if you don’t have a business solution, they’ll just be putting money in every year for the–you know, as long as the federal government’s around.”

On Being the Next Treasury Secretary:

“Well, I haven’t been asked. And I won’t be asked. But the answer is I wouldn’t give up my job. I’m glad to help in any way I can, but I would not do it.

“So I think, you know, we’ll know in a few days, perhaps, who the Treasury secretary will be. And we’ll go from there.”

On President-Elect Barack Obama:

“I think that Barack–I think that Hillary would have made a good president too, and I think Barack will make a terrific president. I think he’s the right person for this time…you need a strong, decisive, smart leader, who can communicate very well with the American people at a time like this. They need somebody they believe in, and I think that he has the qualities that are right for this time.”

On Selling Investments:

“…I do sell stocks. Not very often…if we’re going to put the money in the Goldman Sachs preferred or the General Electric preferred, the Mars-Wrigley deal, to some extent, if we have the money around we’ll use the money that is in cash. But I like to keep a lot of money around, so I will sell some things if I need to sell them in order to buy something else…. We don’t sell businesses, though. Businesses we own we keep.”

On His Next Investment Pick:

Not right now.  But that could change tomorrow. Both GE and Goldman Sachs happened on a phone call I got in the morning and I said yes.  It was–that’s that, something like that.

On Henry Paulson:

“I think it’s a very, very tough situation. There are no silver bullets here. It’s not like some one idea or three ideas that’s all of a sudden going to turn around the economy and the markets. We are in a negative feedback cycle. It’s going to last for a while. I don’t know how long it’s going to last…. And I don’t think I could have done a better job, and I don’t think most of the congressmen could do a better job…. I think that putting the capital in the various financial institutions, probably you’ll get more mileage out of that dollar spent than in the mortgage repurchase program.”