(Updated) roundup of the high-stakes game going on in Silicon Valley:

Brad Garlinghouse’s Peanut Butter memo — The Yahoo executive complained about the company’s “proclivity to repeatedly hire leaders from outside.” This is noteworthy, because he himself was hired from the outside. Before Yahoo, he’d served as chief executive at DialPad, and drove that company into the ground. We reached out to Brad Monday night, and hope to get comment soon.

sonsini.jpgLarry Sonsini can’t be at faultFortune does a long piece about one of Silicon Valley’s most powerful lawyers, Larry Sonsini, and provides good insight into his character. Much of the substance, though, has been covered elsewhere already. Still, a notable quote from entrepreneur TJ Rodgers about why Sonsini is innocent in the options back-dating scandal (reason: he’s too expensive):

“How to give options is well known,” says Rodgers, the Cypress CEO. “You hire outside counsel, they have their word processor kick up a bunch of documents, and they charge you 50,000 bucks. Then you and your HR person give out options according to the plan. You administer it; they’re not involved. You don’t want them [outside counsel] involved, because you don’t want to be sent a bill for $2,000 every time you give out stock options.”

tate.bmpChris Tate takes back Zooomr sale price — Valleyway says Zooomr, the photo site that likes to think of itself as a competitor to Flickr, turned down a $2 million dollar offer from Google, citing Zooomr’s founder Kristopher Tate as the source: “We’re going to take over the world!” he allegedly told Valleyway, adding that his selling price today would be $15 million. VentureBeat checked with Tate, and he had a different tune. He said he didn’t comment, either way, on the price, but did say he’s going to take over the world.

Reid Hoffman kept out of YouTube by his own VC firm — Reid Hoffman, chief executive of LinkedIn tells the New York Times that he wanted to make an investment in YouTube, but that his own venture backer, Sequoia Capital, edged him out by offering better terms. Sequoia could make nearly $500 million from the Google-YouTube deal. The NYT reporter quotes Hoffman saying he is envious of YouTube. However, Hoffman now says he was quoted out of context, i.e, that he was referring to how other people could be envious, and the Times reporter changed his words. He’s sent a letter of protest to the NYT reporter, a copy of which was slipped to VentureBeat.

Blackstone places $36 billion bet on real estateThis is the biggest buyout ever. VentureBeat don’t usually write about later stage deals, but this is just the latest example of the huge amount of private money circulating the economy, and it is trickling down to the venture world too. As we’ve said before, great time to raise money.

Cisco’s acquisition strategy defies science — Here’s an amusing 16 minute podcast of an interview of Dan Scheinman, Cisco SVP of corporate development by Wharton management professor Saikat Chaudhuri. Once you get in a bit, Chaudhuri keeps pressing Scheinman on the “science” of Cisco’s acquisition strategy, because he’s teaching a class on it, but Scheinman keeps letting him down — diplomatically, at least — insisting its largely intuition. He says an acquisition’s success is all in the timing, and these days Cisco is almost always better off waiting. Cisco checks blogs and discussion boards for news about the start-ups its looking at, again an apparent surprise of Chaudhuri.

A degree from Stanford without actually attending — Notable story in the Merc today about increasing number of people getting a degree remotely, in places like China.

Two years later, California’s stem-cell institute is still on life-support — It gets loans while it fights of lawsuits. This is getting ugly.

mylogblog.jpgYahoo buying MyBlogLog? Nah –MyBlogLog is a site that helps bloggers see who their readers are. Yet no one took time to confirm rumors with either company. We looked up Scott Rafer, chief executive of MyBlogLog several days ago, and he said was just out talking to a bunch of people about options; he seemed miffed with the inaccurate reporting. But Yahoo did acquire Swedish mobile company Kenet Works.

Iconix and RockYou have apparently settled — Here’s update story about the suit we wrote about here.

Fenwick’s lawyer says founders may be going too far in this rosy VC environment — Ted Wang, an attorney for several Web 2.0 companies, suggests they may be overreaching in the terms they negotiate with VCs.

Infinera’s 100 Gigabit Ethernet demo — Just recently 10 Gigabit Ethernet had become the cutting-edge technology for optical data transport. Now, Sunnyvale’s Infinera has demonstrated the first ever 100 Gigabit Ethernet network across 4,000 kilometers.

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