Lu previously was Yahoo's executive vice president of engineering for the search and advertising technology group where he was responsible for developing Yahoo's Web search and monetization platforms.
Lu spent 10 years at Yahoo before leaving in August as part of a weeklong of eight executives from the struggling search company. He will officially join Microsoft on Jan. 5 and report directly to CEO Steve Ballmer.
In a statement, Ballmer said, "Dr. Lu's deep technical expertise, leadership capabilities and hard-working mentality are well-known in the technology industry, and Microsoft will benefit from his addition to our executive management team."
After failed bids to buy Yahoo earlier this year, Microsoft is now eyeing some of the company's top talent even as rumors circulate that the two may again be talking about a deal for . Microsoft made a $44.6 million offer in February to buy Yahoo, but then-company CEO Jerry Yang . Microsoft followed with a bid for Yahoo's search business but that deal also .
Ultimately, the dealings with Microsoft and a failed marriage with crushed Yahoo's stock price and led to the departure of Yang.
Microsoft now is taking on Lu, who holds nearly 20 patents, to help rev up its battle with Google on the search and advertising fronts. Google's search business is projected to become larger and more profitable than Microsoft's Windows franchise sometime in 2009. Google has a nearly 65% share of the search market while Microsoft hovers around 9%, according to comScore.
Microsoft's Online Services Group, which includes its online advertising platform, Hotmail and instant messaging service, Live Search and the MSN portals, posted US$770 million in profit during Microsoft's fiscal first quarter of 2009, a nearly 15% increase over the same quarter in 2007.
With Lu's appointment, Brian McAndrews, senior vice president of the advertiser and publisher solutions group, will leave Microsoft. McAndrews, who came to Microsoft when it acquired aQuantive for $6 billion in May 2007, will serve as a consultant to Ballmer and Lu during the next several months.
Scott Howe, who was formerly with aQuantive and was vice president and general manager in the advertiser and publisher group was promoted to corporate vice president and will report to Lu.
Lu as the head of the Online Services Group (OSG) also will oversee the online audience business, which is managed by senior vice president Yusuf Mehdi; the research and development group managed by senior vice president Satya Nadella; and OSG finance, which is managed by Rik van der Kooi who was promoted to corporate vice president.
Before joining Yahoo, Lu was on the research staff at IBM's Almaden Research Center. He previously was research associate at Carnegie Mellon University and a faculty member at Fudan University in China. He holds bachelor of science and master of science degrees in computer science from Fudan and a doctorate in computer science from Carnegie Mellon University.