A hired gun for Microsoft, in pursuit of Google

Qi Lu knows as well as anyone just how difficult it is to take on Google. For nearly a decade, Lu played a leading role in building Yahoo’s Internet search and advertising technologies. The effort was so important that Yahoo backed it with billions of dollars to acquire companies, hire armies of engineers and develop and run its own systems. Yet Yahoo fell further and further behind and many analysts said the company was simply outgunned by Google.

Lu, who is 47, left Yahoo 14 months ago, but now finds himself once again leading the charge against Google. This time, he is backed by a patron that vows to spend even more than Yahoo did on the mission: Microsoft. “It’s an unfinished mission that I would like to work on,” he said.

The challenge for Lu and his team remains enormous, and success appears improbable. But since Steven A Ballmer, Microsoft’s chief executive, tapped him to become president of the company’s online services division in December, Lu, a self-effacing engineer who is one of the most private and atypical executives in the upper ranks of the Internet industry, has earned the confidence of Microsoft’s troops and helped to bring a dose of optimism to a beaten-down team.

Possessing unusual stamina and a maniacal work ethic, he has pushed his team hard to give Microsoft an important victory. In nightly 9:30 meetings over several weeks, he leaned on his managers to find creative ways to structure a sweeping and complex partnership with Yahoo. The deal, signed in July, will give Microsoft something it has coveted for years: a vastly larger audience that will make Bing, its search engine, the runner-up to Google.

But Lu and his team will have a lot of running to do. Even after adding Yahoo’s search traffic, Bing’s share of the search market will be less than half as big as Google’s. Closing that immense gap will be difficult, in part because most users are happy with Google, which is constantly improving its search service.

In a lengthy interview last week at Microsoft’s headquarters, Lu said he was not underestimating the challenge. But over time, he said, Microsoft has a chance to offer a service that is different and compelling enough to compete effectively. For Microsoft, succeeding in search is vital to the company’s long-term health. For Lu, it is a mission he felt obligated to take on.

“I do think that this is answering a call to duty,” he said. Wearing a Bing T-shirt tucked into jeans held up by a black leather belt and wearing brown sandals and white socks, the wiry Lu looked more like an engineer than a senior executive.

And with an engineer’s logic, he laid out his reasons for returning to the fray. Search determines where users go online, and search advertising is the most powerful economic force on the Internet. The business is too important to be controlled by a single company, he says.

Having grown up poor in China, Lu said, he feels duty-bound not to squander the rare opportunity he was given. He was raised by his grandparents in a rural village with no electricity or running water. His intelligence got him into Fudan University in Shanghai. After finishing his master’s degree in computer science, he attended a talk given by Edmund M Clarke, a professor of electrical and computer engineering at Carnegie Mellon. Impressed by Lu’s questions and research, Professor Clarke invited him to apply to a doctorate program.
Lu, who earned about $10 a month teaching at the university, could not afford even the application fee, so the professor arranged for the fee to be waived and Lu was admitted. Lu says the challenges he faced growing up turned out to be a blessing: “You can say it’s harsh, but it teaches you so many things.” After earning his Ph D in 1996, he went to work at one of IBM’s prestigious research labs.

Lured to Yahoo

He was lured to Yahoo in 1998. A few years later, as Google and Yahoo squared off, he headed the development of Yahoo’s search and search advertising technologies. By all accounts, Lu poured his heart and soul into the mission. Hired as an engineer, he rose through the ranks not by personal ambition but rather through sheer intellectual ability and his willingness to take on ever larger roles. Eventually, he ran a team of about 3,000 engineers.

“He shunned the limelight, but he was considered one of the stars of Yahoo,” said Tim Cadogan, the chief executive of Open X, an advertising technology company, who worked closely with Lu at Yahoo.

Lu’s colleagues at Yahoo and Microsoft say his intellect is matched only by his work habits. He sleeps three to four hours a night. On most weekdays, he wakes up around 4 am, goes through his e-mail and runs four miles on a treadmill while listening to classical music or watching the news.

He prefers to be in his office between 5 and 6 am to have uninterrupted time to prepare for his day. He is often sending e-mail to his staff until midnight or later. (Lu, who is married and has two daughters, reserves much of the weekend to spend with his family.) When he first met Lu, Jeff Weiner, a former senior executive at Yahoo who worked closely with him for years, thought his punishing schedule was not sustainable. But Lu’s manager brushed aside Weiner’s concerns, saying “That’s just Qi,” (pronounced Chee).

“I look back on that because of the number of people who came to me since to express concerns, and I said ‘that’s just Qi,’ ” said Weiner, who is now chief executive of LinkedIn, a social networking site. “He is not wired like everyone else. Anyone else doing that would be burnt to a crisp, but Qi was one of the most productive people I’ve ever worked with.”

His work ethic and intellectual ability have earned him praise from rivals. “I have the highest respect for him,” said Udi Manber, a vice president of engineering for search at Google, who worked with Lu at IBM and Yahoo. “He is probably the best competition I can have.”

Lu’s discipline also expresses itself as loyalty. On his last day at Yahoo, for example, a problem came up with a database, and he worked side by side with his engineers trying to fix it. He left only when, at midnight, his e-mail and network access were automatically cut off.

Furthermore, Lu declined to talk with Ballmer, who had become interested in meeting him, until after his long-planned departure from Yahoo because he thought it would be improper.

Lu was contemplating opportunities in venture capital and even thought of returning to China. But he changed those plans after Ballmer flew to Silicon Valley with two Microsoft engineering executives to meet Lu to informally discuss the search business.

Ballmer was immediately smitten.

“He walked out of the room and I’m talking to the other two guys and I say,
‘God, I think we ought to talk to that guy about coming to Microsoft,’ ” Ballmer said in an interview. They immediately called Lu on his cellphone, Ballmer said. “He came on back, and we started the dialogue about him joining the company, which eventually bore fruit.”

Lu knows it will take much longer for his own mission to bear fruit. “There is lots and lots and lots of work ahead of us,” he said.