Microsoft Overhauls Online Services Group

Microsoft is again shaking up its online services organization. One prominent former Yahoo exec is on his way in, while former aQuantive CEO Brian McAndrews is on his way out after only 18 months at Microsoft.

The company announced Thursday that it has hired former Yahoo search and advertising executive Qi Lu as president of the company's Online Services Group, reporting directly to Microsoft CEO Steve Ballmer. Lu headed up Yahoo's Web search and monetization platforms as executive VP of engineering for the company's search and advertising technology group before leaving Yahoo in August in the midst of a mass exodus of top talent from the struggling Web site.

Microsoft heavily pursued an acquisition of Yahoo earlier this year, only to be repeatedly rebuffed. The company later backed away from its offers to buy the troubled Yahoo, which continued its southward turn. Yahoo founder Jerry Yang stepped down amid criticism last month. Lu joins fellow Yahoo search VP Sean Suchter as the second Yahoo search exec to defect to Microsoft.

Lu has mainly tech experience, but not the traditional marketing and advertising experience McAndrews brought to the table. Before joining Yahoo in 1998, Lu worked was a researcher at IBM and Carnegie Mellon University and a faculty member at a Chinese university.

Looking at his experience, Lu looks set to be tasked to push an agenda of tech innovation more than one steeped in pure marketing and advertising prowess. It's possible Microsoft could be gearing up to overhaul its advertising and search technology. As president of Microsoft's online services group, Lu will manage the company's search and advertising arms, as well as a number of its other online properties.

"Microsoft has built a great foundation for its search and advertising technologies and put an amazing team of researchers and engineers in place to drive the next wave of innovation in online services," Lu said in a statement.

That said, Microsoft too has been struggling to find a foothold against Google and to build up its reputation as a Web powerhouse. It's also racked up big losses in its online business. "The fact is that we are not where we want to be in this business yet and we've been in this position longer than we'd all like," Kevin Johnson, then-president of Microsoft's platforms and services division, wrote in May before months later jumping ship for Juniper Networks.

In losing McAndrews, Microsoft says goodbye an executive that many outsiders thought could bring big things for the company.

"Brian McAndrews built a world-class business for advertisers and publishers and led the successful integration of aQuantive into Microsoft, setting the foundation for our next phase of growth," Ballmer said in a statement. "While I am sorry to see Brian leave the company, I respect and understand his decision and wish him nothing but the best in the future."