When Microsoft gave up on buying Yahoo! in 2008, the withdrawal from the takeover was not complete. In August that year, Dr. Qi Lu, who led Yahoo!'s search engine activity, left the company. The following December, he was appointed president of Microsoft's Online Services Group. His mandate was first of all to wage war. This was the battle he was responsible for during the decade he spent at Yahoo!, and which he now continues at Microsoft, against the common enemy - Google - which has a near monopoly in online search, with a 65.4% share of the search market in the US, compared with 13.6% for Microsoft, and 16.1% for Yahoo!, according to comScore figures for February.
Lu, who took part in the Think Next event at the Microsoft Israel R&D Center yesterday, was one of the people behind the launch of Microsoft's search engine in mid-2009. He prefers not to look at Microsoft's search engine activity by way of comparison with Google. "We don't see our effort as a battle against Google, but rather as a mission to provide a new kind of search capability," he says in an interview with "Globes" marking his visit to Israel. "As far as the company is concerned, this is a long-term effort, and we believe that search as we know it today can be a whole lot better. There is room for a great deal of innovation in the area."
At Microsoft, Lu inherited a business hemorrhaging money, with a bottom line painted bright red for eight years, ever since Microsoft got seriously into search. Financially, the company has lost billions of dollars, while the damage to its image, not to mention the opportunity cost, is incalculable. In the fourth quarter of 2010, Microsoft made an operating loss of $543 million on sales of $690 million in its online business. Google, on the other hand, made a profit of $3 billion in the fourth quarter on sales of nearly $8 billion, mostly from search.
Microsoft's effort to make progress on search has several aspects, from technology to strategic partnerships. As far as technology is concerned, Lu is convinced that Microsoft can lead the field. "We have some of the most brilliant minds in the industry working on this challenge," he says, talking about the next generation of Internet search, with solutions such as semantic search that can analyze the meanings of words.
On the collaboration side, Lu finds himself close to his former employer, after Microsoft teamed with Yahoo! To provide search services on Yahoo! sites. "We think this is a successful deal for both companies," Lu says.
Another collaboration Microsoft has announced recently relates to a much sexier field, social networks, where Microsoft's Bing will become the official search engine of Facebook, and will help in searching among the network's 600 million members. "Social networks are an exciting field," says Lu, "We will collaborate in any area where there is an opportunity to meet unanswered needs."
Lu has acquired his reputation not just because of the jobs he has held in the high-tech world, but also because of his lifestyle and work ethic. He reportedly starts his work day at 4 am, and continues for almost 19 hours. He almost completely shuns media exposure, and even this interview took place by e-mail, after much persuasive effort by the Microsoft Israel R&D Center. He chose to ignore the questions about his past in China.
Lu's life story, according to media reports, is that of someone who through hard work and some good fortune managed to rise from life in a remote Chinese village to the top of the high-tech world. He spent his childhood with his grandfather in Jiangsu province, in a house without running water or electricity, five hours journey from Shanghai, where his parents lived. He studied for a higher degree in computer science at Fudan University in Shanghai, and worked as a teacher for $10 a month.
He made his way to the US after he impressed Professor Edmund M. Clarke of Carnegie Mellon University who came to lecture at Fudan University, and who financed the $45 application fee Lu needed to pay to register for doctoral studies at Carnegie Mellon. After completing his doctorate in 1996, Lu worked at IBM, before joining Yahoo!.
Published by Globes [online], Israel business news - www.globes-online.com - on March 22, 2011
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