BoomTown went down to Silicon Valley’s most exclusive country club–also known as Stanford University–where Microsoft CEO Steve Ballmer took to the stage today for a talk at Memorial Auditorium for the Entrepreneurial Thought Leaders Seminar.

4:32 pm PDT: Ballmer was pretty much on time, delivering a rousing hello and some good words about being back. He had attended Stanford Business School many moons ago, before dropping out and joining Microsoft (MSFT). Good move, I’d say.

He offered anyone in the room jobs, if they were smart, and then gave out his email. Although he did leave out the pertinent fact that the software giant just laid off 3,000 workers earlier this week.

Well, that.

Then, Ballmer launched into his speech, which began with him talking about the “tough economy.”

The slide behind him was a picture of a glass half-empty or half-full, depending on your attitude, with the notes:

Economic “Reset”

Optimistic about the future.

4:40 pm: Ballmer then told his “entrepreneurial” story. There was a lovely picture of the young Ballmer with some hair. Not much, but some.

Lots of chatter about old computers ensued. Zzzzzzzz.

The early days of Microsoft were next, including how founder Bill Gates was worried about how Ballmer would bankrupt the nascent company by hiring more staff, a delightful story the pair told at our D: All Things Digital conference last year.

4:46 pm: Then the “emerging technology trends.”

Which are, according to Ballmer: many-core processing; screens everywhere; natural UI; all content digital.

Like All Things Digital! I always knew Steve and I were soul mates!

Because it is Microsoft, he moved into “software-powered experiences,” which means, according to Ballmer’s slide: a rich client + cloud, spans multiple devices and is persistent and personal.

“You world needs to be brought together,” said Ballmer. “You may not want to manage the cacophony of devices you deal with today.”

I may not. Or I may. Ballmer, may I?

4:55 pm: It was not a long or much of a content-rich speech. Ballmer wrapped up with the idea that “The Time Is Now.”

He noted that it is a great time for start-ups, with “all the right ingredients” that “dream big.”

What ingredients? What dreams? Ballmer was not saying much about his secret cooking tips for baking a tech behemoth.

4:57 pm: Time for questions from the students.

The first was about whether big- or small-company experience is better.

Both, said Ballmer. Depending on the problem. “You want to blend those things pretty well,” he said.

It is all about the ingredients! And blending. Also sifting, in my humble opinion.

The next question was about the state of the browser business.

Ballmer said it will get more innovative. We’re waiting!

The next was about what the main problem typically is with companies that have trouble making it.

“Too many companies can actually hang on for almost too long because there has been too much money funding these ideas,” said Ballmer.

Yes, we are soul mates!

5:04 pm: The next question was about the culture of a company from its start and how Ballmer has shaped Microsoft’s culture.

“I would say I have shaped Microsoft culture a lot,” he said. “Sometimes for the better, sometimes worse.”

Ballmer compares himself and Gates to “parents” of Microsoft.

That was very Iowa of him.

(As I said: soul mates!)

5:09 pm: The next question was about how he decided to leave Stanford Business School.

“They still have a spot for me if I want to go back and finish my MBA,” Ballmer joked.

But, he noted, it was not much of a risk to leave school.

When Ballmer did waver about going back to school, Gates convinced him to stay. Thank goodness, as he said he would have become an investment banker or a consultant.

The next question was about Google (GOOG), which was not named, I suppose for fear that it would set Ballmer off and there would be chairs a-flying.

“The No. 1 player [in search] is a lot bigger than us,” said Ballmer. “We are like a start-up.”

Well, a really, really, really rich start-up, which has been sued by the federal government for antitrust violations, and convicted.

5:14 pm: The next question was about ideas he might have missed.

Ballmer called himself “a mini-venture capitalist,” noting that figuring out what investments to make is tough.

He joked about the disastrous Microsoft Bob product. That always gets a laugh.

The next question was about how much attention Microsoft will give to cloud computing.

It gave him the chance to make a pun using the movie, “Three Men and a Baby,” noting that the “future is about three screens and a cloud.”

Ahahahahahahaha! Okay, not at all.

A question was asked about taking risks and tips for dealing with it.

“Valuable experience is valuable experience,” said Ballmer.

Say what? Is that a word puzzle? This is starting to feel like “Angels & Demons.”

Ballmer advised the students to “love doing the work that you’re doing.”

It is apparently all about the love at Microsoft. Who knew?

5:22 pm:

Two questions about consolidation, which is code for Yahoo (YHOO).

“I’m glad we went down the road,” said Ballmer, waxing nostalgic about the failed takeover attempt.

But he added he still thought a partnership of some sort between the pair is a good idea. “There may or may not be appropriate discussions,” said Ballmer.

There may. Or may not. Carol, may Steve?

Then there is some love for competitors, Facebook, even Apple (AAPL) for the iPhone.

Feel the love!

5:25 pm: The last question is about what he wished he had done if he could do it over.

He would have taken more computer science courses.

We are so not soul mates.

Later this afternoon, BoomTown will be front and center–well, I will probably get seated on the far side and way back–for a speech to be delivered by Microsoft CEO Steve Ballmer at Stanford University’s Memorial Auditorium on innovation and entrepreneurship. Part of the Entrepreneurial Thought Leaders Seminar, it is aimed at students there who are looking for some advice from tech’s big dogs.

Ballmer is, of course, all that, with a blustery bark and an occasional bite.

Of course, he’s probably channeling a more charming demeanor in another meeting sources say he plans to have with Yahoo CEO Carol Bartz on this visit to Silicon Valley.

The second since Bartz took over Yahoo in January, it’s about whether or not the pair should make nice after a long period of useless acrimony, and strike a significant search and advertising partnership.

Many close to the discussions, which have been going on seriously since late March between small teams from both companies, said that how the pair get along and whether they can actually pull the trigger together is all that matters.

Rapport is key, especially since such a deal has been exceedingly complex to figure out.

The latest idea is one in which Yahoo (YHOO) would take over both search and display advertising sales and Microsoft (MSFT) would run the tech for both behind the scenes.

It’s not clear if trading other assets–-such as content–-or a large investment in Yahoo by Microsoft are being considered too.

If struck, such a deal would be a major shift for both companies in their business focus and would also tether them tightly together to better compete with Google (GOOG), which overwhelmingly dominates the lucrative search market.

Still, sources said, there is a lot keeping Microsoft and Yahoo apart, most especially a profound wariness over controlling key technologies and tense history between them.

In addition, execs on both sides–such as Microsoft digital head and former Yahoo tech exec Qi Lu–are treading carefully about every item, unsure of how so many ties would be handled.

“Could we fire Microsoft if they did not perform?” asked one Yahoo exec. “Or would we be stuck without control over our destiny, if it all went south?”

For her part, sources who have spoken to Bartz about the recent discussions with Microsoft said, she has remained resolute in not giving up too much power to Microsoft.

Microsoft is also gun-shy after its disastrous takeover attempt of Yahoo failed last year–with Ballmer loath to make another such epic mistake in trying to turn around the software giant’s lackluster digital efforts.

“He simply does not want to look stupid again,” said one Microsoft source. “So it weighs on whether he has the guts to put himself out there.”

That’s ironic, of course, since his Stanford speech today is on entrepreneurialism and innovation, which always require an ability to use failure as a way to move forward.

The question is, can Ballmer walk that talk?

Recently, BoomTown reported that talks between Microsoft and Yahoo had gotten “hot and heavy.”

That mood seems to be continuing, as many sources close to the situation on both sides said that the pair are coming ever closer to a search and advertising partnership deal.

Said one source: “It’s closer than it has ever been…we’re finally talking about the how rather than the if.”

“It’s meaningful,” added another source. “The fact that there is even progress and engagement, after so many failed attempts between us, says a lot.”

Indeed, it remains a good sign that there seems to be a lot of engagement between the two sides of late, and some sources think a deal could even be struck within the next few weeks.

As I also reported last week, the latest idea is one in which Yahoo (YHOO) would take over both search and display advertising sales and Microsoft (MSFT) would run the tech for both behind the scenes.

It’s not clear if trading other assets–such as content–or an investment in Yahoo by Microsoft are being considered too.

In any case, any such deal would be a major shift for both companies in their business focus and would also tether them tightly together.

Many think they need to be tethered, given that Google (GOOG) overwhelmingly dominates the lucrative search market. Yahoo is strong in display, although that market has been harder hit in the recent economic downturn.

But whether or not Yahoo and Microsoft can come to a partnership agreement–given the deep complexities of the situation, the wariness over controlling key technologies and tense history between them–is a big if, of course.

Still, sources on both sides seem more positive than ever before.

Microsoft execs, for their part, report that new Yahoo CEO Carol Bartz is much more straightforward to work with than former CEO Jerry Yang.

And Yahoo’s side seems convinced that Microsoft appears more willing to make a deal happen and is more flexible on terms than in previous encounters.

Both sides are using very small teams to discuss the possible partnership, mostly in Silicon Valley. Some of the Redmond, Wash.-based Microsoft team, in fact, are in the Bay area now.

Sources said those involved on the Microsoft side include: Digital head Qi Lu, a former Yahoo tech star; top M&A and strategy exec Charles Songhurst; Online Audience Business SVP Yusuf Mehdi; and several others.

On the Yahoo side: North America EVP Hilary Schneider, who leads the efforts; General Counsel Michael Callahan; top Yahoo ad operations techie Mark Morrissey, who was key to its revival of the Panama ad system and has recently been leading product development on its new ad platform; finance SVP and Chief Treasury Officer Mike Gupta; and Products EVP and CTO Ari Balogh, although he is more in the background.

Of course, the only two execs who will matter, if these teams finally manage to hash out details, are Yahoo’s Bartz and Microsoft CEO Steve Ballmer, as well the both companies’ boards.

Interestingly, Ballmer is slated to be at Stanford University’s Memorial Auditorium to give a lecture on innovation and entrepreneurship as part of the Entrepreneurial Thought Leaders Seminar on Wednesday afternoon.

Whether Ballmer is seeing Bartz on this trip or not is not clear.

But he has to at some point. The approval of a deal–which could be struck soon, if terms can be reached–will be entirely their call.

[Postcard image courtesy of CarbonClothing on Zazzle.com.]