Perki

Microsoft Hires Lu, Commences Project Granola

I think this is a confirmation they remain committed to search, not a major change in strategy.

Microsoft has had a vacuum at the top of their search division for some time, this is just simply filling that spot with someone qualified for a change; nothing more.

As far as getting the good Doctor because of his involvement with project Panama -- umm, no. Project Panama is a failure which is why YHOO is in trouble with no where to go but down.

This move also highlights the fact that acquiring Yahoo would be acquiring a hollow shell. You can "rent" the main asset, search marketing share, without assuming the overhead, through management agreements.

Yahoo Destroying Shareholder Value, Internet Balance of Power

Though there is some duplication, an AOL + Yahoo ( Yaol? , Yahaol? ) merger would appear to be the only course of action for growth. Absent that, Yahoo has a good technical group, lots of Internet assets and traffic. They just need to identify a few good strategic niche areas from those assets and focus on them, they could remain profitable.

MSFT/Yahoo would have been a disaster from a business point of view, but would have bailed out those shareholders that made an untimely investment in the company.