But is he? And is he still, which the stock move would imply? I received a passionately argued note Monday from Drew Ianni, who runs programming for ad:tech expositions, whose conferences have become must-attend events in the online advertising industry. I thought it’d be worth publishing his musings in their entirety:

The collapse of Yahoo’s stock price was a widely predicted occurrence in that if the deal collapsed the market correction for Yahoo! is ultimately a non-event as Yahoo’s market value simply returns to the level before the dance with Microsoft.

The more interesting question is why did this deal collapse? None of us have been privy to the conversations between Microsoft and Yahoo. But from my perspective, this deal failed not because of any business related issues or price but because of culture.

Once again, Microsoft has proven that it simply does not understand the culture of Silicon Valley. Microsoft has a long track record of abusing its power in its attempts to destroy Silicon Valley companies. From Apple (AAPL) in the 80’s to Netscape in the 90’s to Yahoo and Google (GOOG) today.

These and other companies are part of the fabric of the Valley, have given it its lifeblood and represent the traditions and rich heritage of what the Valley is about. Those who seek to destroy this ethos are not looked fondly upon in Northern California, and Microsoft has long been at the top of that list. If you have been the schoolyard bully for 20 years and wake up one day to find that you have no friends – especially when you most need one – and no one wants to play with you, don’t be surprised.

And the public trashing of Yahoo and threats of proxy battles only made matters worse. Business is cut-throat in the Valley but it is rarely publicly cut-throat. Battles are fought behind closed doors and within relatively narrow circles. And the public airing of dirty laundry is considered unseemly and without tact. If Microsoft wanted to buy Yahoo, Steve Ballmer should have asked Jerry Yang out for coffee at Buck’s in Woodside instead of disrespecting him personally, the company he co-founded and help build, and the greater Silicon Valley.

This deal was never going to happen and the only reason there were conversations is because Yahoo faces some serious long-term issues. But even with a remarkably generous offer that simply cannot be matched by any other company, Yahoo chose to go it alone. That’s what most of us would do if we were publicly disrespected. It was looking like the arrogance of Microsoft would simply cost them a few extra billion dollars. But it ultimately cost them the entire deal.

I think Drew is on to something. There’s no question that there wasn’t a culture fit.

Having said that, I think Drew’s wrong. People talk endlessly about how Silicon Valley is different. Guess what? The laws of gravity apply here too. And this battle isn’t over.