Microsoft acquires Yahoo from the inside out, appoints Qi Lu

By Scott M. Fulton, III | Published December 5, 2008, 11:42 AM

Microsoft President of Online Services Dr. Qi LuThe man who could very well have given Yahoo the keys to the kingdom of online advertising, is now a very senior executive at its arch-enemy and would-be suitor. But will Microsoft do more with Dr. Lu than it did with aQuantive?

In a move that, by now, surprised precisely no one, the man who helped Yahoo get its next-generation advertising platform off the ground has now officially joined Microsoft. Dr. Qi Lu, the principal architect for the Yahoo advertising platform first known as Panama, then Apex, then AMP, then finally APT, is now Microsoft's President of Online Services.

Dr. Lu's achievement thus far has been the architecture and creation of an advertising and publishing platform that could still yield results for Yahoo, if anyone's left at that company to keep it plugged in and working right. Essentially, APT is a system that utilizes an audience targeting system to enable both publishers and advertisers to reach highly targeted readers by pairing their content together. Lu's background as a researcher with Carnegie Mellon and IBM Almaden Research Center, prior to joining Yahoo, could change the entire flavor of a key Microsoft division whose foundation up to now has been centered around marketing.

The appointment also helps Microsoft finally answer the question, "Who runs your online services?" When Ray Ozzie first joined the company as CTO, it appeared that online would be his mission. Steven Sinofsky was tapped in 2006 to run what had been called "Windows Live Services," before he was moved over to heading the Windows department. Later, platforms head Kevin Johnson took over the reins of online services, before surprisingly jumping ship to become CEO of Juniper Networks.

But when Dr. Lu left Yahoo, CEO Steve Ballmer made it clear right away that Microsoft wanted him, using The Wall Street Journal as his personal megaphone. Lu was one of a watershed of Yahoo executives and employees to leave that company last spring.

In a sense -- though not directly -- Lu replaces Brian McAndrews, whom Microsoft acquired in May 2007 as part of its $6 billion takeover of aQuantive. That acquisition was supposed to provide Microsoft with the ingenuity and the reader-targeting platform it needed to go up against Yahoo, at a time when Panama/Apex/AMP/APT seemed like a genuine threat -- one which drove former Microsoft division president Johnson to suggest that it swallow Yahoo in order to get that technology. McAndrews had been senior vice president for advertising and publishing, officially, though that made him effectively the chief researcher for its platform technology -- a position that has just been "kinged," as they say in checkers, by Lu.

Whether Dr. Lu takes with him any expertise that Yahoo could later claim was its own intellectual property, his mind alone is probably a treasure trove of exploitable information. If anyone knows how to out-apt APT, it's the system's own father.

But Lu will be president of the Online Services group -- not chief researcher, not senior vice president of engineering or head of the research department. And although Lu has had experience with facing the public, appearing on-stage frequently with his friend, outgoing Yahoo CEO Jerry Yang, whether he can provide leadership to the one division of Microsoft that desperately needs it, is a matter of some concern.

Comments

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So what happens to Yahoo? Did Jerry Yang truly kill Yahoo?

Great move by Microsoft but maybe they should still focus on their core bread and butter (fixing the Vista OS ).

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this was an expected move by microsoft and it will be one of the final nails in yahoo's coffin.

now the question is whether the microsoft employee's will sabotage their new acquisition or get out of his way and give him the freedom to do what is necessary.

microsoft is at times it's own worse enemy.

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whatever

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Ballmer did what it was needed to be done.
why get a whole bunch of Yahoo employees, get on an agreement with Yahoo, reorganize Microsoft to fit them in, when you can just get the man that has the key? the purpose of Microsoft it was to get that advertisement technology, now they have it, inside Dr. Lu's mind. and he can create it again on the fly. and even enhance it.
This is what Microsoft should have done since the beginning.

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Lu quit Yahoo!
Lu joined Microsoft.
Lu is a willing seller and found a willing buyer.
Lu will make millions for himself at his new employer.

Its just business and some play the game better than others.

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Welcome Dr. Lu,
We hope our managed services
will assist many small companies
during rough economic times.
Ann Smith
Administrative Assistant
Expetec Technology Services, Md.

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Despite pitfalls with some of their systems, Microsoft has always tried to fix problems as they arose, I have a content user of XP for several years and never intended to go through the growth pangs that Vista would bring. Never tried Yahoo, so have no comment on their services.

Cloud computing is the wave of the future and it seems Microsoft has a leg up. Generating revenue from web advertising would be a plus and perhaps one day Microsoft will buy either Google or Yahoo.

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"Microsoft has always tried to fix problems as they arose"

Sorry, but I couldn't help but chuckle as I read that!

As it brings to mind Office and the myriad dysfunctional services that have never been quite repaired but were simply obscured by a more marginalized features - release after release....until they were simply totally obscured by the fact that its even harder to find any of them in the 'new' ribbon interface!

LOL!

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"until they were simply totally obscured by the fact that its even harder to find any of them in the 'new' ribbon interface!"

What a foolish statement. Ribbon has made it much easier to find what we want. It's just a matter of time. You need to get used to it. What an idiot

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LOL, this is such a transparent strategy, but one we can fully expect from Microsoft. "Nooo, he didn't give us any of Yahoo's technology - he's an administrator, see? Not a researcher or anything like thaaat ..". We'll see how well that plays during the inevitable multi-year court case.

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That also depends on the details of that 'wonderful document' he probably signed upon leaving Yahoo.

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