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Microsoft has hired Qi Lu, a former executive with Yahoo, as the new president of its Online Services Group. What does that mean? Lu will be in charge of search and online advertising for the software giant — the two fields in which it desparately wants to compete with Google.

Earlier this year, Microsoft tried to acquire Yahoo to bring itself closer to that goal. While it may or may not still be interested in purchasing Yahoo’s search business, Microsoft’s hiring of Lu gives it a 10-year veteran of the company where he did things like lead all of engineering for Yahoo search and advertising. One would have to assume Microsoft got him for less than the $44.6 billion it offered Yahoo.

Along with this hire, Microsoft is also losing Brian McAndrews, the former chief executive of aQuantive, which Microsoft purchased last year. McAndrews was seen as a likely candidate for the job Lu got.

Below find Microsoft chief executive Steve Ballmer’s email to the troops on the hire:

Search, advertising and online services are critical to Microsoft’s long-term strategy. To succeed, we need the right talent. Today, I’m pleased to announce that Qi Lu will join Microsoft as president of our Online Services Group. Qi will oversee all efforts in search, our online advertising platform, and all of our online information and communications services. Qi will join Microsoft on Jan. 5 and report to me.

Qi is one of the most respected technical minds in the industry. He comes to Microsoft after 10 years at Yahoo, where he most recently served as executive vice president of engineering for all of Yahoo’s search and advertising development efforts. Before joining Yahoo, Qi was a researcher at IBM’s Almaden Research Center. He has a doctorate in computer science from Carnegie Mellon, and he holds 20 U.S. patents.

Qi’s combination of deep technical expertise, proven leadership capability and broad business knowledge is rare in our industry. There is no one better qualified to guide our work to reinvent search and online advertising.

While I’m excited that Qi is joining Microsoft, I’m sorry to share the news that Brian McAndrews has decided to transition out of the company. Brian came to us with the acquisition of aQuantive in 2007. Since then, he has helped build a world-class business in online advertising that provides a solid foundation for future growth. I have great respect for the important contributions Brian has made to Microsoft, and I wish him the very best in the future.

On Monday at 4 p.m. Pacific Time, Qi will join me at Café RedWest for an Employee Town Hall. I encourage you to attend or to watch the webcast. If you have questions for Qi or me, please send them in advance to [REDACTED] and we’ll try to answer as many as possible.


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