After dinner and a few drinks last night, a very refreshed Rupert Murdoch stopped by for a chat outside the bar at the Sun Valley Lodge and revealed that he did not think Microsoft would succeed in buying Yahoo.

“They’re not going to do a deal,” he said. “There’s bad personal feelings…in six months [Microsoft] will walk away.”

It has been suggested that News Corporation is prepared to swap its MySpace social network for a stake in Yahoo but Mr Murdoch said any involvement by the company in the takeover saga was “not likely”.

With his sons James and Lachlan chatting on the terrace outside, Mr Murdoch then talked about his experience at a conference session earlier that day. He had attended a presentation given by Niall Fitzgerald, the deputy chairman of Thomson Reuters, and had taken exception to Mr Fitzgerald’s comments about the US.

Mr Fitzgerald had suggested that the US was viewed negatively around the world because of foreign policy mistakes. “People in Europe forget that the US saved them from two world wars, from Nazism, communism…and America never asked for a penny.”

The conversation turned to the US election and Mr Murdoch revealed an admiration for Barack Obama. The New York Post, which is owned by News Corporation, has already endorsed the Democratic candidate.

“There’s a sliver of hope that America could be great again under Obama,” he said, adding: “I met him and was impressed. But you know what I’m like…I get to meet them for an hour and I’m seduced.”

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.