"We gotta beat this Conan. I mean for God sakes, how are you feeling that Jay left late-night television and now we got a new guy we gotta compete with?" asked Stern.
"And I wanna say something to this audience about loyalty. Dave put me on national television many, many years ago before I was known. And I have stuck with Dave. I didn't like Jay. I never liked Jay. I can't stand Jay."
The 55-year-old radio host's scathing comments drew big applause from the studio audience. But he didn't stop there.
"Let me say something. Now we can talk. I never seen anybody who behaves like a robot like this guy," Stern continued. "I watched his final show. He says goodbye to The Tonight Show. He says goodbye reading it off a teleprompter for cryin' out loud. Where's the emotion, and where's the humanity?
"Here's the host that we want to watch!" Stern said, pointing at Letterman.
Stern recounted his one and only appearance on The Tonight Show, when he turned up with two lesbians and turned off Leno.
"He's shocked, he walks off his own show. I knew it wouldn't last," added Stern.
Meanwhile, this just in from the home office...
According to trade reports, the 62-year-old Letterman is close to signing a new deal with CBS to continue hosting Late Show for two more years, taking him through 2012. Letterman's, current deal, which earns him an estimated $30 million annually, had been due to expire next year. The new deal is expected to be for a lesser sum.
No official word on the deal from either CBS spokesman Chris Ender or Letterman's production company, Worldwide Pants.