Can the Windows Live Team Reverse the Microsoft Brain Drain?

While Microsoft has done little to tout the fact, the Windows Live team is scooping up big-name developers with Google, Amazon, AOL, BEA and Technorati pedigrees.

Another day, another Microsoft defector.

At least thats the public perception. Over the past couple of years, Microsoft brain drain has been a hot topic, with Microsoft developers and executives jumping ship for, Google, Technorati and a variety of other Web 2.0 players and startups.

However, despite the dearth of headlines, Microsoft has been doing its own share of poaching, too. And many of Microsofts new big-name hires, such as Steve Berkowitz, the former CEO who just joined Microsoft to head up the online business unit, are choosing to join Microsofts MSN and Windows Live teams.

The MSN/Windows Live teams are leading the charge to rebrand and refurbish many of Microsofts existing Internet services, including Windows Live Mail (formerly Hotmail), Windows Live Messenger (formerly MSN Messenger) and Windows Live Search (formerly MSN Search).

They are building a number of brand-new Windows Live services, designed to take on similar competitive offerings from Google, Yahoo, AOL and other established services players.

And they are working on making Windows Live a development platform designed to attract third-party coders to build on top of Microsofts Live programming interfaces and services.

"The Live teams definitely seem to be more like Google/Yahoo/, et al., than traditional Microsoft product teams in terms of hiring and other modus operandi," said Peter OKelly, an analyst with The Burton Group.

"I suspect thats partly because of their domain—with very different opportunities and constraints relative to traditional software product development, thanks to the Web-centric model, for example—and partly because of the strategic imperative for Microsoft to rapidly gain momentum relative to exceptionally aggressive competitors such as Google."

To deliver on its ambitious charter, the Live team needs some serious fire power. And, increasingly, it has been finding it outside the company.

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