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Summary:

Microsoft (NSDQ: MSFT) is downsizing its high-profile Live Labs group, which was created three years ago to speed up innovation in the compa…

Microsoft (NSDQ: MSFT) is downsizing its high-profile Live Labs group, which was created three years ago to speed up innovation in the company’s online business, paidContent.org has learned.

The group, whose mission has been to hatch new ideas and eventually pass them on to product teams at the company, voted twice a year on what projects team members should work on for the next six months. Team members also devoted a week each quarter to a project of their own choosing. Projects didn’t necessarily always have direct applications to Microsoft products.

Microsoft spokeswoman Stacy Drake McCredy said the economy had forced the company to rethink the group’s mission. The death of Live Labs as it has existed, combined with Google’s decision to cut some of its more experimental products, raises the question of whether these kind of futuristic initiatives are falling out of fashion among leading internet companies, or are just a victim of this recession.

Moving forward, about half of the Live Labs group will remain but will focus solely on search, while the other half will join product groups within Microsoft, including Windows Mobile and the company’s online services division, says McCredy. Splitting up the group is an about-face for Microsoft, which had argued that it made sense to have a separate internet-specific applied research group that worked outside of its online product teams.

“Economic conditions are imposing constraints that challenge the original Live Labs model by diminishing the group

  1. This is horrible. This is the time for these huge companies like Microsoft and Google to be investing in R&D. By the time we are out of this recession, it will give consumers a reason to buy/use these products. It's not like either of these companies don't have the cash reserves to keep the staff on board and take a quarter or two loss and have awesome products down the road, rather than making a profit but having no excitement or innovation within the company.

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  2. What a ridiculously unfounded article: http://livelabs.com/blog/what-s-next-for-live-labs/

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  3. live labs honcho gary flake and ray ozzie had a looooong chat at foo camp … heard it was at least partly about live labs' relationship with Ray's new pet, Startup labs, being run out of the fancy new 'vertical campus' in cambridge, ma.

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  4. Gary Flake is very much part of the problem. He failed at yahoo and will fail at MSN.

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  5. What's horrible ? We are at the time where big companies who have the power to kill crush newcomer start to do such mistake, and leave much more room for newcomers to become big enough to replace them; That's how IBM allowed Microsoft to make a dent in the software market at the end of the 70's until it was too late to stop them.

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  6. I'm with jmdesp here. There's nothing better than having incumbents scale down innovation labs in a downturn and make room for the next round of start-ups ready to disrupt their business. That's what this is all about!

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  7. It is good they are focusing on search. It is always hard to innovate with loud-speakers and bill boards around you with too much meta data about innovation.

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