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Microsoft Names Ex-Yahoo Executive as Internet Unit Chief

SAN FRANCISCO — Microsoft named Qi Lu, a former Yahoo executive, to run its struggling Internet unit on Thursday.

Mr. Lu will fill an important position that had been vacant since the departure in July of Kevin Johnson, who played a central role in Microsoft’s failed attempt to buy Yahoo earlier this year.

In selecting Mr. Lu, who will become president of the money-losing online services group in January, Microsoft chose an executive with deep technical knowledge over others with more advertising and media experience. He will be leading the company’s challenge to Google, which dominates the search and online advertising businesses.

“Microsoft is trying to emulate Google in naming a technologist to head the online unit,” said Youssef Squali, an analyst with Jefferies & Company.

Microsoft also said that Brian McAndrews, a senior executive in the online unit, had decided to leave. Mr. McAndrews, the former chief executive of aQuantive, an advertising technology company that Microsoft acquired for $6 billion last year, was one of a handful of internal candidates that Microsoft considered for the online services position.

Mr. Lu, a computer scientist with a Ph.D. and a former I.B.M. researcher who holds 20 patents, left Yahoo in August after 10 years there. He most recently was an executive vice president overseeing engineering for two important areas: online search and advertising technology.

“Dr. Lu’s deep technical expertise, leadership capabilities and hard-working mentality are well known in the technology industry,” Steven A. Ballmer, Microsoft’s chief executive, said in a news release. Microsoft declined to make an executive available to discuss the appointment of Mr. Lu.

Mr. Ballmer reiterated recently that Microsoft was no longer interested in acquiring Yahoo but said that it remained open to a search advertising partnership between the companies. He also said that there were no active talks between the companies.

On Thursday, a Microsoft spokesman, Frank Shaw, said: “There is nothing new with regard to Yahoo.”

Mr. Squali said that if Microsoft and Yahoo struck a search deal, Mr. Lu’s knowledge of Yahoo’s operations could be important to Microsoft. “It will make the prospects of any integration that much easier,” he said.

But Mr. Squali added that short of such a deal, Microsoft would continue to struggle to build a sizable audience for its search service.

A continuing exodus of executives has depleted Yahoo’s management ranks. Many of the departures were prompted by Yahoo’s struggles to turn around its business and frustration with the slow pace of change. Jerry Yang, the chief executive, announced last month that he would step down as soon as the board appointed a successor.

Last month, Microsoft hired another Yahoo search executive, Sean Suchter, to run its Silicon Valley search technology group.

Microsoft said Mr. McAndrews agreed to remain in a “consultative capacity” to Mr. Lu and Mr. Ballmer for the next several months. Scott Howe will oversee Microsoft’s advertiser and publisher solutions business, previously headed by Mr. McAndrews.

Mr. Johnson was also in charge of Microsoft’s Windows operating system business. He left Microsoft in July to become chief executive of the networking technology maker Juniper Networks.

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