After missing the first two days of the Allen & Co conference in Sun Valley, Jerry Yang of Yahoo has finally arrived and is being chased by reporters wherever he goes.

Despite the pressure being applied to Yahoo by Carl Icahn and Microsoft, Mr Yang looked pretty unfazed.

He then told Reuters and the Associated Press that he didn’t think he would meet Microsoft at Sun Valley, but he ignored questions about whether he was planning to stay with the company. This is unlikely to do much for the speculation surrounding his future.

If you thought the annual gathering of media moguls, bankers and tech entrepreneurs was an orgy of self-congratulatory back-slapping, you might want to think again.

Sparks flew at a morning session here today when Rupert Murdoch launched a strong defence of President George Bush, in response to comments about America’s global image from Niall Fitzgerald, the deputy chairman of Thomson Reuters.

According to Techblog’s man in the conference room, Mr Fitzgerald gave a gloomy assessment of the US. He was talking alongside Muhtar Kent, chief executive of Coca-Cola and Sir Howard Stringer, chairman of Sony.

Mr Fitzgerald, the former co-chairman of Unilever was “pretty down” on America, according to my source, blaming, among other things, foreign policy mistakes by President Bush. “That annoyed the hell out of Rupert and he really let him have it.”

Apparently, Mr Murdoch then stood up for President Bush and defended the decision to invade Iraq. He then apparently said the president’s problem was “one of communication, not practice”. It was, our man adds, “a pretty sharp rebuttal”. Then it was Sir Howard’s turn to speak and he, apparently, warned those in the room against writing off the US.

It was a fairly public setting but some of the key players in the Microsoft-Yahoo saga still managed to have a very private pow-wow in the Sun Valley Inn late on Wednesday night. Huddled in deep conversation around a table at one end of the bar were Sue Decker, Yahoo’s president, Terry Semel, the company’s former chief executive, and Sergey Brin, the co-founder of Google.

Brin’s presence was of particular note, given the search deal Yahoo agreed with Google after failing to agree a purchase by Microsoft.

Joining them was Bill Miller of Legg Mason, the US fund which owns more than 5 per cent of Yahoo’s stock. After the group dispersed, Mr Miller and Ms Decker spent a few minutes laughing and joking outside the bar – suggesting, perhaps, that at least one of Yahoo’s key shareholders continues to have faith in the group’s management.

Bill Gates made his first appearance at Sun Valley earlier today, dashing out of a presentation on 3-D cinema by Jeffrey Katzenberg of DreamWorks Animation. Following him at speed out of the doors of the Sun Valley Inn were Rupert and Wendi Murdoch, who were doing their best to avoid the phalanx of photographers assembled outside.

Mr Gates has remained tight-lipped on the prospects of a Yahoo deal but presumably will not have been too heartened to hear about the united front on show in the bar the previous evening.

(LA media correspondent Matt Garrahan is reporting for the rest of this week from Sun Valley, Idaho)

Powerbrokers, moguls and billionaires from the media and technology worlds have converged on this quiet mountain retreat in Idaho for the annual Allen & Co get-together.

Started 20 years ago by Herb Allen, the powerful media banker, as a relaxing time-out for his clients to meet and schmooze, this has come to be known as a place where deals get done. Most famously, Michael Eisner and Bob Iger struck a deal for Walt Disney to buy Capital Cities-ABC on the Sun Valley golf course in 1996.

Expectations are certainly low for a round of deal-making this year. With the US economy in the doldrums and media stocks in a slump – Disney and Time Warner have all seen steep share declines this year – most media moguls are keeping their heads down and attending to business. There is one long-overdue deal, however, that is on everyone’s lips: a resolution of Microsoft’s pursuit of Yahoo.

To judge by the relaxed mood in the bar of the Sun Valley Lodge on Tuesday night, the Idaho mountain air may be just the thing to calm the tensions that this saga has aroused recently. Some of the main actors in the Yahoo drama were at hand, mingling with the media world’s elite.

Gordon Crawford of Capital Global Investors, which has a stake of more than 5 per cent in Yahoo, enjoyed a drink with Jim Wiatt, senior partner at the William Morris agency. Robert Johnson, the founder of Black Entertainment Television was also at the table, while James and Lachlan Murdoch flitted in and out of the room, drinks in hand, popping out to the terrace to smoke a cigarette.

Google’s Eric Schmidt, who recently pulled off a search advertising alliance with Yahoo that has raised the bar even higher for Microsoft, made a brief appearance in the bar, as did Michael Eisner, the former Disney chief executive who has become a big investor in digital media via his Tornante vehicle.

Others in attendance at this year’s conference include Rupert Murdoch, Bill Gates and Jerry Yang.

Relations between some of these characters have certainly been frosty recently. According to Allthingsd, Mr Crawford just gave Mr Yang a dressing down and said that he’s considering throwing his weight behind Carl Icahn, the billionaire financier who is leading a proxy fight to remove the Yahoo board. But if there’s to be a final resolution of the Yahoo mess, Sun Valley could be the place for it to happen.

Matthew.Garrahan@ft.com