According to sources, Microsoft is close to striking a nonexclusive data-mining deal with Twitter to integrate the microblogging service’s full feed into the results of its Bing search service.

News of the deal, which was still being worked on by engineers and execs at both the software giant and the start-up as late as yesterday, could even come as early as today at the Web 2.0 Summit conference in San Francisco.

Qi Lu, the head of Microsoft’s online services division, is being interviewed at the event at 11:30 am PDT.

Note: Lu is scheduled to appear onstage after Yahoo (YHOO) CEO Carol Bartz, who is now too sick to attend, the company said. She also missed Yahoo’s third-quarter conference call due to an unspecified illness.

Thus, Lu is the main event of Web 2.0 tomorrow morning and it would be a good place to make a big announcement, if the talks are successful.

But sources close to the situation caution that the deal could still run into a snag and was not yet complete, although it seems more likely than not that a deal will soon be struck with Microsoft (MSFT) first and then Google (GOOG), which is the other company Twitter has been negotiating with.

BoomTown had previously reported that Twitter was in advanced talks with both the search rivals about just such a real-time search arrangement.

There could be other possibilities on the table, said sources, such as one of the big companies advertising on Twitter or any number of other Twitter partnerships with either one.

When asked about the talks onstage at Web 2.0 yesterday, Twitter CEO Evan Williams turned coy, according to numerous reports, joking “Whose deals?”

But, in fact, Twitter, which is based in San Francisco, is very much engaged in dealmaking in this regard.

Here is what I wrote previously, as to what and why:

Sources said a number of scenarios are being discussed to compensate Twitter for its huge and potentially valuable trove of real-time and content-sharing information, generated from the data stream of billions of tweets from its 54 million monthly users.

These include a number of structures, including a payment of several million dollars to Twitter, along with various revenue-sharing proposals that would give Twitter a piece of the revenue made from search results.

The deals, stressed sources close to the situation, are nonexclusive, especially because Twitter’s management is keen to remain independent and also nonpartisan in the growing search battle between Google and Microsoft.

This means Yahoo–which recently struck a search-technology and online-advertising partnership with Microsoft–could also license Twitter’s feed to make its search results even more robust, although Boomtown could not determine if the company is in talks with the San Francisco start-up.

Sources said it is also possible that no agreement would be reached with either company.

And execs at Twitter, Microsoft and Google had no comment when asked about talks.

But doing these kinds of data deals with big search players does make a lot of sense, since it would be hard for Twitter to turbocharge its own search engine without running into the big cash-laden guns at both Google and Microsoft, which recently launched its new Bing search service.

Twitter is, instead, seeking to create a large open platform, which many could plug into, from search engines to marketers to publishers to developers.

Twitter has also been considering offering premium services to these groups and is contemplating some form of advertising offering.

But, most of all, Silicon Valley’s hot start-up is focusing now on spurring growth and engagement, along with fine-tuning its product offering.

Being deeply integrated into big search services would give Twitter a huge footprint.

Microsoft had already done a small experiment this past summer integrating Twitter data into search results, starting with tweets of bloggers like me.

How much indexing of its data Twitter will allow is unclear, but the company has certainly bought itself time to think carefully about all its options, given that it now has a lot of money in the bank.

Late last month, Twitter raised another $100 million in new funding, after already having raised $55 million.

This has given it a $1 billion valuation, despite negligible revenue.

The valuation also effectively stated that the innovative company was pretty much putting itself out of play to be acquired and is very interested in forging its own destiny.

Both Google and Microsoft execs have contemplated the idea of buying Twitter in the past, although no serious talks ever moved forward.

If they both strike data deals with Twitter, they will get the next best thing–an ability to offer all the information disseminated on Twitter in search results.

We all liked Mike. In fact, we all loved the pugnacious, energetic and restlessly entrepreneurial Silicon Valley exec.

Sadly for those who knew him, Mike Homer died today at his home surrounded by family and friends, after a long battle with a severe illness. He was 50.

Homer is survived by his wife, Kristina, and three young children: James, Jack and Lucy.

His funeral is at Saint Raymond’s Catholic Church in Menlo Park on Thursday.

In 2007, Homer was diagnosed with Creutzfeldt-Jakob disease.

A rare, neurodegenerative “prion” disease, which in Homer’s case has occurred sporadically rather than via infection (the well-known variant that occurs in animals is called mad cow disease), CJD’s incidence is one case in a million annually, and few survive beyond a year after exhibiting symptoms.

His illness inspired his family and many friends to find treatments and a cure for the cruel disease, and include the man–Dr. Stanley Prusiner–who won the Nobel Prize in 1997 for discovering prions, infectious agents that are at the heart of CJD.

In late 2006, Homer began suffering from memory problems. Another close friend, Netscape co-founder Marc Andreessen, aided Homer in getting to the right doctors at Stanford University Hospital, where he was diagnosed.

Quickly, via angel investor and close Homer friend Ron Conway, who serves on the board of the University of California, San Francisco, Medical Foundation, Homer’s case was moved to UCSF. The hospital there is the only place in this country that has a major laboratory doing both research and clinical trials on CJD.

Still, there is no known cure for CJD, and treatments have been few. That might change, given the push that Homer, his family and friends had been making to accelerate the pace of discovery for treatments and a cure by raising many millions of dollars for the cause and pushing for even more aggressive development.

At an event in Palo Alto in 2007 for those interested in helping beat CJD–organized by Conway and well-known Silicon Valley exec and Homer mentor Bill Campbell, with Homer in attendance–he was in fine form, greeting well-wishers with a laugh and sassy attitude, especially given the dire situation and obvious difficulties with speech and movement.

As I wrote then:

Such fighting spirit was typical of Homer, whom I met when I was doing my first book on the rise of America Online more than a decade ago, when he was an executive at the then-high-flying Netscape.

He had also, like many, put in time at Apple and was known throughout the industry for his hard-charging and straightforward style. He needed it in the later days of Netscape, when he arduously tried to shift the company’s focus from a browser-software business besieged by Microsoft to a portal business.

Despite his sometimes tough demeanor, Homer was always willing–unlike so many others–to debate his business in an all-out-on-the-table manner I found refreshing compared to the sometimes earnest and smooth spin of most dot-com entrepreneurs.

Most of all, even when you disagreed over an issue, he always left such arguments at work and was ready with his quick laugh or a razor-sharp quip no matter what.

Recently, before his illness, Homer had been investing in and mentoring a series of start-ups. But he had also been focusing a lot on philanthropy and, most of all, his family and, especially, his three small children.”

My deep condolences go out to them and, really, everyone who had the privilege of knowing Mike.

More about his career and memories of Mike to come. But until then, here’s the video that was shot at the 2007 Palo Alto event called “The Fight for Mike,” which is introduced by Campbell: