With only a wee bit of provocation, Mark Hurd raised an alarming prospect Tuesday afternoon: He won’t be the CEO of Hewlett-Packard forever. “It’s important to know when your work is done,” he told me during a 50-minute interview in the conference room across from his corner office at HP’s headquarters in Palo Alto, Calif. “CEOs can stay too long.”

Let’s be clear: Hurd isn’t leaving. Not even close. In short, he doesn’t think his work his done. Unlike Meg Whitman, who famously predicted to Fortune that she’d leave eBay (EBAY) after 10 years — an accurate forecast, as it turned out — he isn’t even offering a guess as to the length of his tenure. Indeed, one of his favorite expressions, “We’ve got a lot of work to do here,” illustrates the point: So long as Hurd thinks there’s more to do he’ll be around.

It’s just that the CEO who may be the best big-company operator in the country is all about making uncomfortable observations that so far have ended up being the right call for his company: Market share isn’t the best goal to shoot for; even good businesses need to be examined carefully (especially their cost structures); and strategy and execution trump vision any day of the week.

Hurd has every right to be satisfied. Largely on the strength of its non-U.S. businesses, HP (HPQ) reported Tuesday that it grew revenue 13 percent in its first fiscal quarter, which ended in January. Earnings jumped 31 percent. Even more importantly, the company raised its guidance for the full year, which ends in October. The midpoint of that range, profits of $3.52 per share, or more than $9 billion, represents a 5 percent increase over what Wall Street had been forecasting. In a rare sign of the market perfectly assimilating new data, HP’s shares had jumped about 5 percent in after-hours trading by the time I sat down to talk with Hurd.

What you see after watching Hurd for a few years, as I have, is that part of his style simply isn’t to be satisfied. Despite nearly three years of focusing on improving the selling process at HP, Hurd says the company is still not good enough at sales. “It isn’t in our DNA,” he says, echoing past comments. He announced Tuesday the company had added 2,000 salespeople in the last year alone. HP’s computer business has improved dramatically, but its famous printer business needs to focus more on high-end systems and has done a poor job of forecasting the high-volume inkjet business. The size of its non-U.S. business currently is a source of great strength, but Hurd says HP needs to invest for more aggressively in selling in its home market. “You should think of HP as a company of transformation with a bunch of mini-transformations within that,” he says.

So the edgy dissatisfaction that has made Hurd such a success is still there. (He pointedly told analysts an hour earlier he was “not happy” by the inkjet performance.) At the same time, Hurd is in his element. HP’s stock price has roughly doubled since he took over in March, 2005. Yet at $46, it trades for only about 13 times forecasted 2008 earnings, the low end of HP’s historic range and a discount to the overall market. That’s both frustrating to Hurd and an opportunity. (He nods his head — and initially says nothing — as I make this observation.) “I try not to get into that dialogue,” he says. “Sectors get multiples, not just companies,” he adds, noting that the IT hardware sector currently is out of style.

Hurd loves to talk business, but there are a few topics he won’t touch. I ask, if Dell (DELL) can get its act together will that will hurt HP? Hurd doesn’t talk about the competition. I’m curious to know his perspective on Microsoft’s (MSFT) bid for Yahoo (YHOO). Both are partners, he notes, and leaves it at that. (On Feb. 13 News Corp. (NWS) announced that Hurd is joining its board, undoubtedly making him even more reticent on the subject than he already would have been.) He completely stays away from the subject of his predecessor, Carly Fiorina, even by implication. He boils down the CEO’s responsibilities to three tasks: setting strategy (not offering a vision); aligning operations and modeling ways to execute on the strategy; get the best team to help the CEO. “There are a thousand distractions that keep you from doing that,” he says. But that’s where the focus needs to be.

So far so good.

You can sum up the success of Hewlett-Packard’s (HPQ) solid first-quarter results in one word: Globalization. HP, an iconic Silicon Valley company, long has been a globetrotter. It was early into China, for example, and one reason its painful periods of cost-cutting have been noteable is its sizeable workforce in Europe, where it’s tough to fire people.

Tuesday, though, a big part of HP’s success is the very nature of its non-U.S. sales. The company gets 69% of its sales outside the United States, and it’s reaping the benefits. Revenue grew 13% to $28.5 billion in the quarter that ended in January, an astounding feat for a company that estimates its overall revenues this fiscal year will total as much as $114 billion. Earnings, minus one-time events, grew 31% to $2.8 billion. The company threw off $3.2 billion in cash.

It’s a sign of the times we live in that CEO Mark Hurd is positively giddy about HP’s performance outside the U.S. He told journalists Tuesday afternoon that U.S. revenue growth of 6% wasn’t too shabby but that consumer spending at home isn’t “as robust as we’ve seen in the past.” It’s good news, he said, that HP’s “Americas” business isn’t as big a part of the company’s overall business as it used to be. In a sense, he echoed comments Goldman Sachs (GS) CEO Lloyd Blankfein made at a Fortune conference last October, noting that Goldman has to go where the capital is. HP, in turn, goes where the tech buyers are.

Giddy, by the way, is a good word to describe Hurd Tuesday afternoon. Anyone who knows the HP chief executive knows that he’s about as no-nonsense as they come. That hasn’t changed. But he’s clearly charged up. He rifled through his talking points with reporters — cost cutting, adding sales people (2,000 new ones last year alone), and a diverse product base are the three legs of his operational stool — and then good-naturedly answered quesitons for 15 minutes.

Hurd, who tends to run from the limelight, and, by extension, from journalists, almost seemed to be enjoying himself. Who can blame him?

It’s being widely reported that Yahoo (YHOO) and News Corp. (NWS) are back in talks to combine Yahoo with MySpace and other properties that make up Fox Interactive Media, News Corp.’s online arm. The companies held what I’m told were very preliminary talks along a similar vein last year. The deal would have three main components: 1) News Corp. would contribute FIM to Yahoo; 2) News Corp. would invest in Yahoo; 3) a private-equity partner would inject yet more cash into Yahoo. The goal, in theory, would be to raise Yahoo’s value with the cash investments, thus obviating the need for Yahoo to sell to Microsoft (MSFT).

Here’s the problem. Or, rather, the problems. It’s going to be tricky to value MySpace, which will be the linchpin of the value of what News Corp. is contributing. If whatever News and Yahoo were to assemble didn’t add up to Microsoft’s current offer ($31), or counter-offer, the board of directors at Yahoo would be in a pickle.

Couldn’t they just accept a lower bid with the argument that Yahoo is worth more independent than selling out? Sure. Then they’d get sued. They’ve got to be able to best Microsoft’s offer in a reasonable timeframe, or they’re not doing their fiduciary duty.

There’s more. In a note to clients Wednesday, UBS analyst Ben Schachter (who had a buy rating on Yahoo at $19, when many of his competitors had lost faith, because he figured Yahoo’s falling price would provoke a sale, or at least a bid) reasons that the only way for a YahooSpace to achieve necessary profits would be do a search outsourcing deal with Google (GOOG). That’d bring the companies back to the same regulatory conundrum they’ve already been grappling with: Google’s search share is too big. There’s also the question of whether Yahoo needs MySpace. After all, “Yahoo’s problem has not been a lack of inventory, ” writes Schacter, meaning that it already has a huge audience. It’s problem, he writes is “its poor execution on optimizing monetization.” That means Yahoo isn’t so good at making money from its 500-million-plus audience. Schacter has a $34 price target on Yahoo because he thinks Microsoft will raise its bid.

So is Yahoo wasting its time talking to News Corp.? Of course not. Its stock traded over $30 Wednesday, closing at $29.88. To the point of my earlier post, that’s a sign investors expect a higher bid from Microsoft, not that it’s overly impressed with a News Corp.-Yahoo tie-up.

My friend, the Newsweek columnist Daniel Gross, posted an entertaining and informative column this week on Slate about what he sees happening next in the Microsoft-Yahoo merger. Like everything Dan writes, this column is worth reading, partly because it’s delightful and also because he does a great job of explaining how these catfights typically work. I agree with everything he wrote — except his conclusion.

To boil down his wonderful words, Dan believes that because Yahoo’s (YHOO) stock price hovers around $29.50, where it’s been more or less since Microsoft (MSFT) offered on Feb. 1 to buy the company for $31 a share, Wall Street is signaling its belief the deal will collapse. He reasons that if investors believed a higher bid was coming, the stock would trade higher. The fact that no private-equity or sovereign-wealth firm has materialized to bid for Yahoo is further proof that no one wants it and that Microsoft won’t fight.

I beg to differ, and not just because I wrote in the current issue of Fortune that a Microsoft acquisition of Yahoo is inevitable. First, Yahoo’s stock price is held back in part because Microsoft’s stock price is down, and half its offer is in stock. Second, if the market really believed that Yahoo will succeed in telling Microsoft to buzz off, the stock wouldn’t be at $29 and change. It would have plunged back toward $19, the sorry level to which it had fallen just before Microsoft dropped its bomb.

Yes, Yahoo traded for $31 not so very long ago. But that was before investors realized how little was going on inside the company, that CEO Jerry Yang was taking his sweet time to clean house, that Yahoo continued to poorly articulate its growth strategy and, perhaps most importantly, that the company faces “headwinds” in its core business, online display ads. Those realities haven’t changed since Microsoft offered to buy the company.

As for another bidder materializing, the fact that nobody — not a phone company, not another media company and certainly not a private-equity shop — has stepped forward tells you something about how the world outside Redmond, Wash., and Sunnyvale, Calif., views Yahoo’s valuation. A financial buyer simply can’t make the numbers work; Only Microsoft can.

But can’t Yahoo simply say no? Sure it can. But if Wall Street really believes no means no, you’ll see a stock drop and lawsuits fly. “We do not believe that Yahoo’s board will be able to turn down a mid-$30s bid without another offer in hand,” RBC Capital Markets analyst Jordan Rohan wrote to clients this week. “Yahoo management has already exhausted the patience of its largest, longest-suffering shareholders and Microsoft’s offer allows them to save some face.” Rohan then reports something I haven’t seen elsewhere: “Microsoft held several meetings last week with some of Yahoo’s largest shareholders. Ultimately, since there is only one class of stock, if those shareholders band together behind the likely-future-revised Microsoft bid, the deal will eventually get done.”Already, that’s beginning to happen. T. Rowe Price and Legg Mason, two large Yahoo shareholders, have gone public with their support for the Microsoft offer.

What this means is that it’s likely wrong to interpret Microsoft’s lack of a higher bid so far as an unwillingness to raise its offer. Instead, think of Microsoft’s behavior as a pause, an opportunity to make Yahoo sweat — or at least get an earful from its own shareholders. Of course Microsoft will raise. But only after Yahoo has the time to consider the meaning of Microsoft not raising.

A few more things to consider, at least for readers not caught up in the mind-messing media games that get played by all sides in this circus. The Wall Street Journalis reporting in Wednesday’s editions that Google (GOOG) is no longer overly interested in pursuing a revenue-sharing deal with Yahoo for search ads. It sources are “people familiar with the matter.” I haven’t checked, but I’m guessing that the Journal, citing “people familiar with the matter,” first broke the news that Google was interested in pursuing a revenue-sharing deal with Yahoo for search ads. Gold star for anyone who can guess where that information started and ended.

Similarly, the conventional wisdom for why Microsoft won’t actually mount a hostile takeover bid, a term of art that is different from the public “bear hug” it currently is pursuing, is that it would scare away Yahoo’s best people. What’s odd about that is that the conventional wisdom up until earlier this month was that most folks you’d want to retain at Yahoo already had left. Conventional wisdom’s a funny thing.

A final thought, and not a happy one for Microsoft, but even less so for Yahoo. Yahoo undoubtedly will draw this process out for a bit. Who knows, they may even force Microsoft to mount a proxy fight, though I doubt it. But let’s say it’s three months before Yahoo acquiesces and another nine months before U.S. and European regulators approve a Yahoo acquisition. Google likely will complete its long delayed DoubleClick purchase this spring. Under this scenario, it would then have a year’s headstart against MSN-Yahoo, which will be the mother of all integration challenges. Neither Yahoo nor Microsoft and the ad businesses it acquired when it bought aQuantive last year will stand still, of course. But talk about distractions.

The Wall Street Journal left out one key nugget in its report over the weekend that Motorola (MOT) and Nortel (NT) are considering a joint venture to operate their combined wireless infrastructure equipment business: They’ve already tried this — and failed. Way back in the early 1990s Motorola and Nortel combined their sales teams in North America to sell wireless gear, the heavy metal that phone companies buy so their customers can use cell phones. It was called Motorola Nortel Communications, and it was a flop. Customers preferred dealing with the original companies, and the two parents fought endless turf battles. The joint venture, which died in 1993, lasted just over a year. (One wonders if anyone at either company even remembers this ancient history. Probably not.)

Joint ventures can work, of course. It’s just hard to think of many that do. And in this case, you’ve already got two companies that have the common experience of failure. Perhaps the biggest difference, though, between 2008 and 1993 is that back then Motorola still wanted to be in this business. Today, the diminished giant just wants out.

UPDATE: A Motorola spokeswoman emailed a “no comment” regarding the Wall Street Journal report. She did, however, offer some thoughts on Motorola’s infrastructure business. They’ll be of interest only to insiders, but here they are:
* While the legacy market is slowing, Motorola is experiencing great momentum in wireless broadband and leads the market in WiMAX globally with 60 engagements with customers in more than 41 countries; this year we will be trialing LTE with key customers to enable greater consumer experiences
• That said, Motorola’s networks business is one of the only profitable companies in this area and has been profitable for the past quarters based on our normal ongoing business excluding any special charges.(we publicly stated this in our earnings calls); recently winning contracts with Zain Group in Saudi Arabia as well as Etisalat and Celtel Nigeria.
• In terms of iDEN we are continuing to see traction. In addition to the US customers we have, for example, there are over 5 million subscribers in Latin America alone.

While much of the West Coast tech world is focused on Yahoo’s (YHOO) attempts to fend off Microsoft (MSFT), another notion currently being passed around Silicon Valley is that Oracle wants to buy Salesforce.com (CRM), a startup that’s like Google in certain respects but couldn’t be more different in one critical way: Salesforce.com makes its revenue selling software, not advertising. As I pointed out recently, while Microsoft obsessed over Google - which, in turn, obsesses over Microsoft - by beefing up its business that sells advertising, Oracle has been buying every enterprise software company it can, a list that includes Peoplesoft, Siebel and BEA. It has been a winning strategy and has accounted for Oracle’s stock trouncing Microsoft’s over the past two years.

So, would Oracle make Salesforce.com its next target? At a valuation of something over $6 billion, Salesforce.com certainly is an easier target than Yahoo is for Microsoft. It fits right into Oracle’s game plan, providing a platform for delivering pretty much any kind of enterprise software online. Salesforce.com CEO Marc Benioff loves to promote the idea that Salesforce.com doesn’t sell software. It does. Its software just doesn’t need to be installed on its user’s computers. If you think about it, Salesforce.com’s approach to enterprise software is exactly Google’s approach, at least in terms of how software is delivered. That’s why there’ve also been rumors that Google would buy Salesforce.com. (Spokespeople for each company declined to comment on the rumor; Salesforce.com hasn’t yet responded. Also worth noting, though Larry Ellison was an original investor in Salesforce.com, as of the younger company’s lastest proxy statement last spring, Ellison did not hold a stake worth disclosing.)

Having said all that, this appears to be one of those wishful-thinking rumors where there isn’t any smoke, let alone fire. (Wall Street puts credence in it, though. Salesforce.com’s stock is up about 9% Monday.) Salesforce.com is approaching the billion-dollar sales mark, but it’s just too expensive for Oracle. It trades for an astronomical 172 times Wall Street’s expectations for Wall Street’s fiscal 2009 earnings. Pat Walravens, an analyst with JMP Securities, pegs Salesforce.com’s enterprise value (market capitalization plus debt) at about six times its 2008 revenue, compared with a 3.6 multiple for its peers.

Part of the relative puniness of Salesforce.com’s earnings is that its financial performance is back-end loaded. It records sales over a long period of time, even when the business is locked up. It used to be that companies with that business model complained that Wall Street didn’t understand them. Given Salesforce.com’s valuation, it’s clear that investors understand it perfectly.

Still, it’s Oracle’s style to buy valuable software assets that for whatever reason are stuck and whose valuations are stalled. Salesforce.com doesn’t fit that bill.