Google's best hope in the Yahoo takeover battle is to have nothing happen. A Yahoo, weak but independent, providing just enough competition to keep antitrust cops off Google's back, is the best outcome. To assure that, CEO Eric Schmidt has turned to the unlikeliest of layabouts: investment banker Frank Quattrone, who's trying to make a comeback after having an obstruction-of-justice conviction overturned. How frustrating for the hard-charging Quattrone: In this assignment, he'll only succeed by assuring that a deal doesn't come to fruition.

Bear Stearns' epic fail will make M&A financing hard to come by. IPOs seem to have gone the way of Kozmo.com. That leaves exactly zero practical exit strategies for VCs. I came away with that insight after swimming through the flood of water metaphors in Tom Abate's economic pulse-taker in the Chronicle.

Having cleared his name of obstruction-of-justice charges, former Credit Suisse tech investment banker Frank Quattrone is launching his own boutique firm, Qatalyst Partners. Several big Valley names volunteered quotes for the press release. It's not surprising that Google CEO Eric Schmidt, who's made his own moral missteps, would be forgiving of Quattrone. But Gideon Yu, Facebook's CFO, makes a more curious appearance. He gave a statement applauding Quattrone's partner Jonathan Turner, not Quattrone himself. But still, it amounts to an endorsement. Does Yu really think Quattrone did nothing wrong? Or, as a minister's son, is he just expressing the highest form of the Valley's belief in the power of redemption?

"My experience with the justice system opened my eyes to the horrific plight of wrongfully convicted prisoners, most of whom don't have the resources to regain their freedom by proving their innocence." — Frank Quattrone, former Credit Suisse First Boston investment banker, in a statement released after federal charges for obstruction of justice were dropped. [San Jose Mercury News]

TIM FAULKNER — Frank Quattrone continues to rehab the perception that he is the poster child for corruption in the late-90s tech boom by following the path of his late-80s counterpart Michael Milken, the Drexel junk bond king: remaking himself as a philanthropist. The former Credit Suisse First Boston investment banker, who helped bring Netscape, Cisco, Amazon, and many other notable tech companies public, has been named Chairman of the Board of the San Jose Tech Museum of Innovation, a charity close to his heart and his wallet.

Feel the love for onetime Valley investment mandarin Smilin' Frank Quattrone, as the San Jose Mercury News extracts numerous complimentary quotes from those eager to make a buck with the man and/or terrified of his potential return. With his many pals paving the way for an easy comeback, Quattrone is rumored to be planning a combination investment bank and private equity fund that may raise something like $3 to $5 billion. Somewhere in the gleeful chittering, you can almost hear that new bubble inflating.

If his criminal charges are all dropped, Frank Quattrone could collect $100 million in back pay from his former employer. As long as the major investment banker (who blew up the dot-com bubble with IPO funding) stays clean for a year, he's golden. Great, story over, next criminal.

You know, I said I wasn't going to link to Always-On, but I've changed my mind. I was reading Always-On (I have a few brain cells left and I'd like to kill them) and I noticed an article by Red Herring founder Tony Perkins defending tech banker Frank Quattrone. Perkins notes that people have "run into Frank Quattrone carrying food, distributing cookies, and hauling the trash out for AIDS charities, Girl Scouts, museums that serve children, and public and private schools." Perkins goes on to say that the bankers aren't solely to blame for the Internet bubble, and I don't disagree with that, but I'm looking forward to hearing the Girl-Scout-trash-hauler defense when Mr. Quattrone tries to explain why his IPO allocations to certain parties were well above the legal limits.
I am a friend of Frank [Always-On]

Attorney General Eliot Spitzer is now negotiating immunity agreements for people associated with Credit Suisse First Boston's former superstar tech banker, Frank Quattrone, many of whom received potentially illegal IPO allocations. A list of 63 "Friends of Frank" who received the allocations in question has served as the centerpiece of the investigations, and I, for the record, would very much like to get my hands on that list. (Anyone? Anyone?)
Frank on ropes [NY Post]